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Apple has finally launched its Apple Pay Later service in the US, a payment system that allows users to pay for their purchases in four interest-free installments. The service was originally announced in mid-2022 but faced multiple delays. Now, Apple has announced that it is introducing the service in a limited way, with select users being invited onto a prerelease version of the service.
According to the company’s press release, Apple Pay Later was designed with users’ financial health in mind. The service has no fees and no interest, and it can be used and managed within the Wallet app, making it easier for consumers to make informed and responsible borrowing decisions.
“There’s no one-size-fits-all approach when it comes to how people manage their finances”, said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet. “Apple Pay Later was designed with our users’ financial health in mind, so it has no fees and no interest, and can be used and managed within Wallet, making it easier for consumers to make informed and responsible borrowing decisions”.
To get started with Apple Pay Later, users must first apply for a loan within the Wallet app. The loan application does not affect the user’s credit score, and if approved, the Pay Later option will be available whenever the user makes a purchase using Apple Pay.
The application process includes a soft credit pull to ensure that the user is in a good financial position before taking on the loan. Apple says that payments must be made using a debit card, as credit cards will not be accepted.
At present, the loans can be from $50 to $1,000, and the service works through the Mastercard Instalment program. Merchants who accept Apple Pay will see an Apple Pay Later option for their customers during checkout.
The Wallet app will show the total amount due overall, as well as the amount due in the next 30 days. The payment schedule can also be seen in the Wallet’s calendar view, and users will receive notifications when payments are due.
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It’s worth noting that Apple formed a subsidiary company specifically to finance all the lending that Apple Pay Later will create. However, Mastercard network connectivity is still being provided by Goldman Sachs.
Apple Pay Later is currently only available to a select few users, but the company plans to offer the service to all eligible users in the coming months. With the growing popularity of buy now, pay later services, it will be interesting to see how Apple Pay Later fares in the crowded marketplace.