Analysts said Apple’s mooted product appeared different to Afterpay in key respects,but the potential entry of the tech giant still underscored the risk of fierce competition from deep-pocketed rivals.
Shares in Afterpay dropped 9.6 per cent $107,Zip Co plunged 11.4 per cent to $7.32,and Sezzle fell 10.3 per cent to $7.96.
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The threat of competition from Apple,which has a market capitalisation of $US2.4 trillion,comes as rivalry is also increasing in Australia. Payments giant PayPal this week launched its Australian BNPL product and said it would waive late fees,and the Commonwealth Bank will launch its BNPL offering next month.
Chief investment officer at Atlas Funds Management,Hugh Dive,said Afterpay’s high market valuation left no margin for error or risks such as major new rivals emerging. Apple and PayPal were big enough to dig in for a long fight for customers,he said. “There’s two pretty big gorillas with enormous cash balances that can handle a lot of pain,” he said.
Chief executive of payments consultancy McLean Roche,Grant Halverson,characterised BNPL firms as “mice” compared with “elephants” such as Goldman and Apple,which he said could “kill off” most BNPL operators.