Apple is finally launching Apple Pay Later, the company’s take on the buy now, pay later (BNPL) business. The company has announced that users can use the service to apply for Pay Later loans of $50 to $1,000 and then repay those loans through four payments over the course of six weeks with no interest or fees.
According to Apple, users can apply for a loan within the Apple Wallet “with no impact to their credit,” but the company notes in the fine print that the Pay Later loan and payment history “may be reported to credit bureaus and impact their credit.” Once approved for a loan, users will start seeing the Pay Later option at checkout in apps and online on the iPhone and iPad. Apple says users will be able to view and manage their loans within the Wallet app and that they’ll receive notifications when payment is due.
Not everyone can access the service today, however. Apple says “randomly selected” users will receive invites to obtain early access to Apple Pay Later. The service is only available in the US and for online and in-app purchases on iOS 16.4 and iPadOS 16.4.
Apple launched a credit card in partnership with Goldman Sachs in 2019, but this BNPL offering marks the first time that Apple is handling the financial side of things by itself. As noted by Apple, the Pay Later program is managed by a new subsidiary, Apple Financing LLC, which the company says “is responsible for credit assessment and lending.” The company did, however, partner with the BNPL program Mastercard Installments to enable Apple Pay Later, while “Goldman Sachs is the issuer of the Mastercard payment credentials.” Apple Financing LLC will begin reporting Pay Later loans to US credit bureaus starting in the fall, the company says.
Despite Apple’s focus on “financial health,” BNPL systems — like Klarna, Afterpay, and Affirm — have come under fire in the past for potentially harming customers. Last year, the Consumer Financial Protection Bureau (CFPB) “identified several areas of risk of consumer harm,” including inconsistent consumer protections, a prevalence of data harvesting, and a risk of debut accumulation, as it states BNPL is “engineered to encourage consumers to purchase more and borrow more.” The CFPB opened an inquiry into several BNPL companies in 2021 and continues to evaluate their impact on consumers.