Shares in Afterpay (ASX: APT) and Zip Co (ASX: Z1P) are down nearly 10 per cent each this morning after a report emerged overnight that tech behemoth Apple is moving into the buy-now pay-later (BNPL) space.
According to a Bloomberg report, Apple is teaming up with US bank Goldman Sachs to build the BNPL product which will allow users to pay off transactions over extended periods of time.
Known internally as Apple Pay Later, the service will use the banking giant as the lender for the loans needed for the instalment payments.
The partnership builds on Apple's existing relationship with the bank - Goldman Sachs has been powering the tech company's credit card product since 2019. However, according to Bloomberg, the in-development BNPL product will not require an Apple Card.
In response to the news, shares in Afterpay have fallen 9.15 per cent to $107.53 per share at the time of writing, and Z1P has also collapsed by 8.84 per cent.
Apple's rumoured move comes in the midst of a flurry of activity in the BNPL sector, with international expansion the current name of the game for Australian players.
Afterpay is currently the clear Australian leader in the space, having well-and-truly broken into the US market, most recently rising on deals with retail giants Sephora, Nike and more.
The company is also exploring a potential listing in the US where e-commerce sales tripled in the first three months of 2021.
Meanwhile, Larry Diamond-helmed Zip Co is making its own push overseas via acquisitions, giving it a foothold in the European and Middle East markets.
Get our daily business news
Sign up to our free email news updates.