Apple’s newly announced Apple Pay Later “buy now, pay later” service is a positive development for partner Mastercard, according to broker Bernstein.
As reported by CNBC, Bernstein analysts wrote in a note on Tuesday “our thesis [is] that for tech giants (and most fintechs), the networks are essential partners for growth (and scale) versus profit pools to take share from.”
“Apple Pay Later, which runs on Mastercard Installment Service, further solidifies Apple’s relationship with the networks, with whom it already heavily partners with for Apple Pay acceptance.”
The economics of Apple Pay Later are attractive for Mastercard, the analysts noted.
“Mastercard will get an installment network fee as well as network fees from any repayment transactions (if on MA debit card),” the analysts wrote.
“A [buy now, pay later] transaction is attractive for the networks since it splits a single transaction into four repayments.”
Apple shares added 1.6% at US$160.15 and Mastercard stock was up 1.1% at US$358.22 in the early afternoon on Wednesday.
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