Apple launches its Buy Now - Pay Later service

Apple Pay Later, the company's version of the buy now, pay later (BNPL) business, is now officially available. Users will be able to apply for Pay Later loans between $50 and $1,000 via the program, and they will be able to return those loans in four equal payments over the period of six weeks with no interest or fees.

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It is possible to postpone paying the entire amount for an item by using Apple Pay Later, which is a feature of the Apple Wallet. The service has been in the works for a time, with Apple initially announcing it during WWDC last year. Apple's iOS 16 was scheduled to be the release date, however, Mark Gurman of Bloomberg claimed in September that "technical and engineering hurdles" were preventing that from happening.

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Users will begin seeing the Pay Later option at checkout in apps and online on the iPhone and iPad once their loan has been approved. Apple claims that users can apply for a loan within the Apple Wallet "without any impact to their credit," but the company warns in the fine print that the loan and payment history "may be reported to credit bureaus and impact their credit." According to Apple, users will be able to view and manage their loans within the Wallet app and will be notified when payments are due.

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But, not everyone can use the service right now. Apple claims that invitations for early access to Apple Pay Later will be sent to "randomly selected" individuals. Only iOS 16.4 and iPadOS 16.4 support the service, which is only accessible in the US for online and in-app purchases. Apple debuted a credit card in 2019 in collaboration with Goldman Sachs, but this BNPL offering is the first time the company is managing the financial aspects of things on its own. 

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Pay Later is managed by Apple Financing LLC, a new subsidiary that assesses credit and lends money under the company's Pay Later program. It is worth noting, however, that Apple has partnered with BNPL's Mastercard Installments program to enable Apple Pay Later. Goldman Sachs is the problem solver of the Mastercard payment credentials, which are provided by BNPL. It is expected that Apple Financing LLC will start reporting Pay Later loans to US credit bureaus as soon as this fall, according to the company.

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BNPL systems, like as Klarna, Afterpay, and Affirm, have come under fire in the past for possibly endangering users, despite Apple's emphasis on "financial health." As BNPL is "engineered to encourage consumers to purchase more and borrow more," the Consumer Financial Protection Bureau (CFPB) "identified several areas of risk of consumer harm" last year, including inconsistent consumer protections, a prevalence of data harvesting, and a risk of debut accumulation. The CFPB opened an inquiry into several BNPL companies in 2021 and continues to assess their impact on consumers.