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You're reading a web archive of Shopifreaks - the Internet's #1 newsletter following the e-commerce industry.

I think that this is the most I’ve laughed while putting together a Shopifreaks newsletter. 

This week in the 73rd Edition of Shopifreaks, I’ve got news for you about inflation, BNPL, marketplaces, and… buttholes? LOL, yeah for real…

I’ve actually got a really jampacked edition for you this week with big news across the board, so I’ll keep this intro short so that you can dive in. 

After you finish reading this week’s newsletter, also check out John Oliver’s piece that aired last night about tech monopolies and the hidden harm they can do. I regularly write about some of the issues he addressed in this newsletter.

And now, onto this week’s edition of Shopifreaks. Thanks for being a subscriber. 

PS: Are you on Twitter or LinkedIn? If so, add me.

Stat of the Week

29% of businesses expect to increase the prices of goods or services sold in June 2022, with energy prices being the main reason why. — According to the Office for National Statistics (ONS). Share it on Twitter & LinkedIn

1. Buy Now, Pay Apple

Apple is officially launching its BNPL offering in the U.S. later this year, which will allow customers to shop with Apple Pay and split purchases into four payments every two weeks. The service will work on iPhone models 8 and newer. 

Rather than work with a bank, lending partner, or 3rd party BNPL firm like Affirm or Klarna, Apple is convinced that it has the data and technology needed to underwrite, approve, and fund the loans in-house without risking big losses. And they’re probably right! I can’t imagine that any startup BNPL firm has anywhere near the amount of data that Apple has on its customers. 

They’ve certainly got the money to fund the loans too. Apple’s cash on hand for the quarter ending March 31, 2022 was $51.5B.

Like a bank, Apple will use credit reports and FICO scores to check consumers’ financial standing, however, it will also use its Apple ID data for identify verification and fraud prevention — which is something that no other BNPL service can come close to offering. 

Payment plans per transaction will max out at $1,000, which means customers will still have to put down a hefty deposit if, for example, purchasing the iPhone 13 Pro Max, which can reach $1600 for the 1TB edition. The specific amount that each customer is approved for will depend on their credit reports and scores.

I was using an Apple product as in the example above, however, Apple Pay Later can be used not only at Apple stores, but everywhere Apple Pay is accepted online and in-store, using the Mastercard network.

Apple said it would require consumers to link their debit card to its BNPL service, and payments will be automatically deducted from their accounts every two weeks unless the customer opts out.

This is big news! It comes at a questionable time when governments and regulatory agencies in U.S. and Europe are looking to crack down on BNPL. However, we all know how slow governments are to act sometimes, so in the meantime, there may be a lot of BNPL on the horizon — at least enough for Apple to take a calculated risk.

Plus there’s no telling what the regulation might be if/when it’s enacted. Whatever it is probably won’t be designed to cripple the industry, which means BNPL is likely here to stay. 

The CEO of Affirm praised the move as a way of bringing the practice into the mainstream. Klarna CEO said Apple’s entry into the BNPL space is “amazing” and a validation of the sector’s business model. Of course, what else are they supposed to say when a competitor as large as Apple enters the scene? In reality, Apple’s entry into BNPL could really hurt existing BNPL services, as Apple Pay is currently already offered alongside BNPL payment options in most stores. Whereas most stores have typically only offered one form of BNPL payment, now they will have two — one of them being Apple.

Nadine Chabrier, a senior counsel at the Center for Responsible Lending, among other experts in the industry, has concerns, particularly about the huge amount of data Apple holds — from where you shop to your resting heart rate –which Apple could use to engage in microtargeted advertising for BNPL.

Chabrier warned, “Apple has a tremendous amount of data on every person who has an iPhone, and they could leverage that to increase spending through Buy Now, Pay Later. And we found through the research that people aren’t really aware of that, and it can be a really insidious way of increasing spending.”

To my iPhone readers out there, let me know the first time you use Apple Pay Later and what you think of it. 

2. SHOP Split + Tobias Lütke’s 40% Voting Stake

At the Annual and Special Meeting of shareholders held on June 7, shareholders approved Shopify’s 10-for-1 split to take place later this month on June 22nd.