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Apple is set to launch its buy now, pay later offering, Apple Pay Later, in the coming weeks. The service allows customers to purchase items using Apple Pay on their iPhone and pay for them in four interest-free installments over six weeks. This move sees Apple enter the lucrative buy-now-pay-later market, which is becoming increasingly popular.
According to a report by Mark Gurman at Bloomberg, the service will be offered for free to customers, and Apple will evaluate customer creditworthiness based on their past spending on hardware and services. This means customers who have a good history of spending on Apple devices at retail stores are more likely to be accepted into the buy-now-pay-later service.
Apple Pay Later will be available in the United States initially, and spending data will be tracked via the user’s Apple ID. The option to use Pay Later will be automatically surfaced in the Apple Pay purchase sheet if available.
Apple Pay Later is unique in that it is the first Apple financial service to be backed by the company itself, not a third party. This means that Apple’s own cash balances are backstopping the loans, and if a customer defaults on an Apple Pay Later product, they will not be offered the chance to use it again, and other features of their Apple ID may be disabled until their account is back in good standing.
While the service was originally intended to debut in September 2022 as part of iOS 16, it was postponed indefinitely due to delays during development. However, it is currently undergoing a large field test with Apple Store retail employees included in the trial, and the feature is expected to go live soon.
In the future, Apple may add alternative payment options that extend loans over longer periods of time, which will potentially carry interest charges. For now, though, Apple Pay Later is set to provide an easy, interest-free way for customers to pay for their purchases using their iPhones.
