Hey fintech friends,

The largest Buy Now, Pay Later platforms may have lost anywhere from 13% to 95% in market value since their 2021 peaks, but that hasn't stopped business from booming:

It turns out that BNPL adoption is still on the rise, now accounting for 2.8% of all retail eCommerce payments. The BNPL market is forecasted to grow to $3.7 trillion by 2030 as shoppers ditch credit cards for lower-interest payment methods, as 15% of consumers report already having done in the past few months.

Apple joined the BNPL chat with Apple Pay Later because it's Apple, and duh. Apple Pay made up only half a percent of Apple's total revenues last year and Pay Later isn't designed to be much more profitable; it does, however, position Apple to take a major stake in BNPL's growing adoption and steer this inertia towards core Apple products.

There's a silent winner in this launch who will gain core product adoption and net a higher profit: Mastercard.

The major card networks are making a move into BNPL, and now the race is on for these players to capture BNPL payment volumes on their own schemas– and reap the higher fees that come with them.

Let's dive into Apple Pay Later, and the emerging role that card networks are playing in BNPL's future.

Everything in the BNPL world is about credit... except for credit.

Credit is about processing fees: BNPLs take a roughly 2%-8% cut on each purchase they facilitate in fees from the underlying merchant. In return, merchants see a demonstrable boost in sales, with BNPL increasing the likelihood of purchase by 20%-30% and growing average cart sizes by ~50%.

Apple's Pay Later feature gives users the option to split payments into 4 installments with no interest or fees (for now?) at any of the 85% of merchants accepting Apple Pay, all within the Apple Pay experience and funded from Apple's own balance sheet.

From a merchant's perspective, Apple Pay Later kicks ass.