Apple is working on a plan to offer a “buy now, pay later” product in partnership with Goldman Sachs, Bloomberg reported on Tuesday.

What Happened: The new service, known internally as Apple Pay Later, will allow consumers to pay for any Apple Pay purchase in installments and rivals similar services offered by Affirm and PayPal, as per the report.

Shares of San Francisco-based Affirm, a company that offers lending services for retailers, dived over 10% on Tuesday after the news. Paypal shares fell as much as 1% on Tuesday in intraday trading.

As per the report, the program could help drive Apple Pay adoption which will see users make purchases via their iPhones instead of credit cards. Apple also draws a commission for those transactions, which will drive additional revenue to its services business worth over $50 billion.

How It Works: Apple users will be prompted to complete a purchase via Apple Pay by four interest-free payments made every two weeks, or across several months with interest. The plan with four payments is called “Apple Pay in 4” internally, while the longer-term payment plans are dubbed “Apple Pay Monthly Installments.”

Why It Matters: Apple’s iPhone-based payment service is widely accepted across U.S. stores and the new addition could further lift its financial capabilities. For Goldman, such an alliance would help it further deepen its footing in the world of consumer banking beyond the world of high finance on Wall Street.

Just last year, Apple purchased contactless mobile payment startup Mobeewave for $100 million to compete in the mobile payments space.

Price Action: Apple shares closed 0.79% higher at $145.64 on Tuesday. Affirm shares closed 10.45% lower at $45.21 and PayPal closed 0.59% lower at $301.19.

This story originally appeared on Benzinga. © 2021 Benzinga.com.

Benzinga does not provide investment advice. All rights reserved.

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