Following delay, Apple launches ‘buy now, pay later’ in the U.S.
Apple is officially rolling out its Apple Pay Later “buy now pay later” solution to select U.S. Apple device users.
Initially announced in June 2022 and then postponed from a fall 2022 release, Apple Pay Later allows users to split purchases into four payments, spread over six weeks with no interest and no fees.
Users of the service can track, manage, and repay their Apple Pay Later loans in one location in Apple Wallet. Consumers can apply for Apple Pay Later loans of $50 to $1,000, which can be used for online and in-app purchases made on iPhone and iPad with retailers that accept Apple Pay digital payments.
Apple has begun inviting random iPhone and iPad users to obtain a prerelease version of Apple Pay Later, with plans to offer it to all eligible users in the coming months. Apple Pay Later is available for online and in-app purchases with iOS 16.4 and iPadOS 16.4.
To get started with Apple Pay Later, 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 take place during the application process to help ensure the user is in a good financial position before taking on the loan.
After a user is approved, they will see the Pay Later option when they select Apple Pay at checkout online and in apps on iPhone and iPad, and can use Apple Pay Later to make a purchase. Once Apple Pay Later is set up, users can also apply for a loan directly in the checkout flow when making a purchase.
Apple Pay Later is built into Wallet, enabling users can seamlessly view, track, and manage all of their loans in one place. Consumers can see the total amount due for all of their existing loans, as well as the total amount due in the next 30 days and all upcoming payments on a calendar view.
Before a payment is due, users will also receive notifications via Wallet and email. Consumers will be asked to link a debit card from Wallet as their loan repayment method. To help prevent users from taking on more debt to pay back loans, credit cards will not be accepted.
Purchases using Apple Pay Later are authenticated using Apple Face ID or Touch ID biometric verification, or passcode, and Apple says users’ transaction and loan history are never shared or sold to third parties for marketing or advertising.
“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 VP 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.”
Apple Pay Later is offered by Apple Financing LLC, an Apple subsidiary that performs credit assessment and lending. Apple Financing plans to report Apple Pay Later loans to U.S. credit bureaus starting in fall 2023, so they will be reflected in users’ overall financial profiles.
Apple Pay Later is enabled through the Mastercard Installments program, so merchants that accept Apple Pay do not need to do anything to implement Apple Pay Later for their customers. Goldman Sachs is the issuer of the Mastercard payment credential used to complete Apple Pay Later purchases.
Apple builds on payment options
Apple has been expanding its digital payment capabilities since first introducing Apple Pay in 2014. One of its most significant payment innovations leading up to Apple Pay Later was its 2019 widespread launch— the no-fee Apple Card. The Apple Card is built into the Apple Wallet app on iPhone, connecting it to the Apple Pay digital payment service and providing users the ability to manage their card on their phone.