Months after unveiling a major update to Apple Pay called Apple Pay Later, which lets users split the cost of an Apple Pay purchase into four equal payments over six weeks with no interest or delinquent fees, Apple has finally launched the feature. But not for everyone – at least not yet.
Apple says starting today it will invite randomly selected users to access a pre-release version of Apple Pay Later, with plans to offer it to all “eligible” users on iOS 16.4 or iPadOS 16.4 in the coming months . Apple Pay Later was set to debut with iOS 16, but technical and technical issues delayed its release, Bloomberg reported earlier this year.
The lucky selected Apple Pay users can apply for Apple Pay Later loans of $50 to $1,000, which can be used for online and in-app purchases on iPhone and iPad from merchants that accept Apple Pay.
To get started with Apple Pay Later, users can apply for a loan in the Wallet app on iOS. They are then asked to enter the amount they want to borrow and agree to the Apple Pay Later terms. There will be a soft credit draw during the application process, Apple says, and — after a user is approved — they’ll see a “Pay Later” option when they select Apple Pay at online checkout and in apps on iPhone and iPad.
Image Credits: Apple
A user’s Apple Pay Later loans appear in Wallet. A calendar view shows a user what to pay for all their loans over a 30-day period.
Apple doesn’t technically offer Apple Pay Later itself. Earlier the credit review and loans are handled by Apple Financing, a subsidiary, which plans to report Apple Pay Later loans to US credit bureaus sometime this fall. As for the merchant side, Apple Pay Later is powered through the Mastercard Termments program, where Goldman Sachs acts as the issuer of the Mastercard payment credentials used to complete all Apple Pay Later purchases.
Apple Pay Later competes with buy now, pay later (BNPL) services from PayPal, Affirm, Klarna, Sezzle, and countless others. Grand View Research predicts that the BNPL could be worth $39.41 billion by 2030.
BNPL continues to be incredibly popular with consumers. According to a survey, more than 51% of Americans said they had tried a BNPL service as of March 2021. And Accenture estimates that the number of BNPL users in the US will reach 45 million by 2021.
Image Credits: Apple Pay
But BNPL products are increasingly scrutinized by regulators, some of whom argue that the BNPL business model is unnecessarily risky. In a survey last year by Credit Karma, more than a third of respondents who had used BNPL schemes reported being in arrears.
“There is no one-size-fits-all approach to how people manage their finances. Many people are looking for flexible payment options, so we’re excited to bring Apple Pay Later to our users,” Apple VP of Apple Pay and Wallet Jennifer Bailey said in a press release. “Apple Pay Later is designed with our users’ financial health in mind, so there are no fees and no interest, and it can be used and managed within Wallet, making it easier for consumers to make informed and responsible decisions about to borrow.”