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Affirm Holdings Inc (NASDAQ:AFRM) shares dipped more than 8% Tuesday on the back of Apple’s (NASDAQ:AAPL) announcement of its new Buy Now, Pay Later product.
Apple Pay Later, which is being introduced in the U.S., allows users to split purchases into four payments spread over six weeks with no interest and no fees, the tech giant said in its press release.
In addition, the company said users can apply for Apple Pay Later loans of $50 to $1,000, which can be used for online and in-app purchases made on the iPhone and iPad with merchants that accept Apple Pay.
Reacting to the news, Mizuho analysts said it “reaffirms the attractiveness of BNPL.”
“We remind investors that the first news about this product occurred nearly 2 years ago and should already be reflected in AFRM’s stock price,” the analysts wrote.
“We remind investors of our proprietary consumer survey (See Link), which suggested that AFRM is less vulnerable than other BNPL providers given more modest customer overlap with Apple Pay (20% vs. 20-30% for others) and a higher AOV (several hundred dollars AOV ex. Peloton (NASDAQ:PTON) vs. $100 for Apple Pay),” they added.
They said that although the knee-jerk reaction is understandable, Apple’s move may “only further solidify the BNPL category as legitimate.”
