Apple is introducing its own "buy now, pay later" (BNPL) service, referred to internally as Apple Pay Later, according to a report released by Bloomberg on Tuesday. And it could mean big changes for the on-demand financial space.

The tech-giant's integration of its BNPL service with Apple Pay will likely hurt both small startups and big BNPL companies, such as Klarna, Affirm, and Afterpay. For years, Affirm, an incumbent in the BNPL market, dominated the space. However, by Q1 2021, Afterpay and Klarna composed 60 percent of US downloads for BNPL apps, according to a report by Insider.

In 2016, Affirm's CEO Max Levchin told Inc. that access to credit is so desired by consumers, especially on the lower income end of the economic scale, that they'll pay seemingly outrageous amounts for it.

Unlike Klarna, Apple Pay Later is not entirely interest-free. To use Apple Pay Later, consumers will pay either four interest-free installments over two weeks or pay interest over the course of several months.

Apple's service will automatically be downloaded onto iPhone devices, which make up more than half of the smartphone market.  While Apple's existing Apple Card credit card is not tied to their new offering, its 6.5 million Apple Card holders may be inclined to use their BNPL service. 

Apple Pay Later could also push more consumers to use Apple Pay, which is already enabled by more than 50 million iPhone users. Apple will team up with Goldman Sachs, which has partnered with Apple for the Apple Card since 2019, to provide loans needed for installment options.

Shares of BNPL companies Affirm and Afterpay have already dropped around 10 percent since the report.