Apple Pay Later: Here’s everything you need to know about Apple’s new Buy Now, Pay Later scheme

Apple Pay Later, the company’s take on the purchase now, pay later (BNPL) business, is officially available. The business stated that users can use the service to register for Pay Later loans ranging from $50 to $1,000 and repay those debts over six weeks with no interest or fees.

Apple Pay Later will be added as a feature to the Apple Wallet that allows you to escape paying the entire amount for a purchase right away. The program, which was first revealed by Apple at WWDC last year, has been in the works for quite some time. It was meant to be released with iOS 16, but coders were dealing with “technical and engineering issues,” postponing its release.

What is Apple Pay Later?
Users can apply for a loan through the Apple Wallet “with no impact to their credit,” according to Apple, but the company warns in the small print that the Pay Later loan and payment records “may be reported to credit bureaus and impact their credit.” 

Users will begin seeing the Pay Later choice at purchasing in apps and online on the iPhone and iPad once they have been accepted for credit. Users will be able to monitor and control their loans within the Wallet app, and they will be notified when payments are due.

Who can use Apple Pay Later?
Not everyone has access to the programme right now. The programme is only accessible in the United States, and it is only available for online and in-app purchases on iOS 16.4 and iPadOS 16.4.

Apple Financing LLC, the company’s new subsidiary in charge of “credit assessment and lending,” manages the Pay Later programme. However, the business collaborated with the BNPL programme Mastercard Installments to allow Apple Pay Later, and “Goldman Sachs is the issuer of the Mastercard payment credentials.” According to the business, Apple Financing LLC will begin reporting Pay Later loans to US credit agencies in the autumn.

In 2019, Apple introduced a credit card in collaboration with Goldman Sachs, but this BNPL product is the first time Apple is managing the financial side of things on its own.

While Apple bills the service as “designed with users’ financial health in mind,” BNPL is a practice that has drawn the attention of government authorities as possibly harmful to consumers.

Why BNPL schemes often trap consumers in the US
On the surface, BNPL services appear to be harmless, as some offer no interest and enable for a simple way to pay back a large purchase in instalments. However, when used for non-essential transactions, this type of service becomes simple to abuse.

In May, SFGate, a news website based out of San Francisco, California, released a report about BNPL services, stating that 73 per cent of BNPL customers are Genz, and nearly 43 per cent have missed at least one payment. 

Another DebtHammer poll found that 30 per cent of users struggle to make their BNPL payments, and that about 32 per cent miss out on paying rent, electricity, or child support to prioritise their BNPL expenses.

Overdraft fees may apply to BNPL services if customers charge them to an account with insufficient funds, and Apple’s small print makes this plain. This means that failing to pay for these innocuous services will have serious consequences, not just for consumers but also for BNPL businesses. 

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