Apple, JPMorgan turn to pay now grow later

Consumer payments-focused startups Klarna, Afterpay and Affirm have a had a good run at changing how people shop and growing rapidly until recently. Now, much bigger players look like they’re gearing up to streamroll the little guys.

Apple Inc. launched an installment-payments feature Monday among a string of product updates. It’s a prime example, along with JPMorgan Chase & Co., of big tech and finance incumbents turning their attention and investment dollars toward areas that young companies have made their own.

The big groups are cranking up the pressure just as slowing economies threaten consumer spending and regulators zero in on fintech. Klarna, for one, is tightening lending terms and cutting staff to focus on profitability in response. Buy Now Pay Later is turning into Pay Now Grow Later. This doesn’t just apply to the startups: Previous cycles in consumer finance show those companies that can continue to invest during the tough times often emerge as winners after the storm.

Apple Pay Later is part of the tech giant’s efforts to create and control more financial products and capabilities itself after years of mainly relying on third parties. The aim is to make money from fees, obviously, but also to capture more of the data on shopping and spending habits that will help it market more services to customers.