Apple enters BNPL game with Apple Pay Later

Apple has entered the Buy Now Pay Later game with Apple Pay Later. Launched this week in the United States, select users have been invited to try out the new feature that allows users to split purchases into four payments, spread over six weeks with no interest and no fee. Accessible through the Wallet feature on IOS devices, users can apply for Apple Pay Later loans of $50 to $1,000, which can be used for online and in-app purchases with merchants that accept Apple Pay. Through the Wallet feature, users can track their loans and receive notifications via Wallet and email so they can plan accordingly.

The card connected to the account needs to be tied to a debit card rather than a credit card to help prevent users from taking on more debt to pay back loans.

“There’s no one-size-fits-all approach when it comes to how people manage their finances. Many people are looking for flexible payment options, which is why we’re excited to provide our users with Apple Pay Later,” 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.”

The feature is enabled through the Mastercard Installments program in association with Goldman Sachs. Apple Financing plans to report user loans to U.S. credit bureaus starting late this year, so they are reflected in users’ overall financial profiles and can help promote responsible lending for both the lender and the borrower.

According to Apple, users can apply for a loan within Apple Wallet with no impact to their credit. They will then be prompted to enter the amount they would like to borrow and agree to the Apple Pay Later terms. A soft credit pull will be done during the application process to help ensure the user is in a good financial position before taking on the loan.

This feature has been long awaited. News of the service first broke back in mid 2021. The company joins a competitive BNPL market with Klarna, Afterpay, Zip, and more to compete with. With ongoing regulation debates, the sector is preparing for a shakeup. Last month, Australian BNPL and fintech company Openpay collapsed, impacted by the pressure of ongoing regulatory constraints tightening up amid other financial issues. Seamlessly integrated through the Apple Wallet feature, this tech advantage may give Apple Pay Later an edge on its competition.

Rolling out as a trial in the States and only accessible on devices running at least iOS 16.4 or iPadOS 16.4, the feature is only available for online and in-app purchases with merchants that accept Apple Pay. A wider rollout is scheduled and you can expect the feature in Australia sometime in the next few months.

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