Apple’s upcoming “buy now, pay later” service will use customers’ previous purchases and spending habits to determine how much they can borrow, according to a report by Bloomberg. The service, which was first announced in June 2022, will allow customers to split the cost of purchases into four equal instalments that can be paid over six weeks. To be eligible, customers must have an Apple Pay account and a history of making purchases at Apple’s retail stores, using its peer-to-peer payment system, Apple Cash, and the App Store.
In addition, the company will take into account whether a customer has applied for an Apple Card in the past, their spending habits using other cards linked to their Apple Pay account, and which Apple devices they own. The loan approval process and background checks will be conducted by Apple Financing, a subsidiary established by the company in 2021.
The “buy now, pay later” service was originally scheduled to launch with iOS 16 in the fall of 2022 but was delayed due to “fairly significant technical and engineering challenges,” according to Bloomberg’s Mark Gurman. During testing, retail employees were reportedly given access to the feature and were able to receive loan approvals of up to $1,000.
While the service will initially allow for short-term instalment payments without additional fees or interest, Apple reportedly plans to offer a longer-term payment option with interest charges in the future. The move to offer a pay later service puts Apple in direct competition with other fintech companies like Afterpay and Klarna, which have seen significant growth in the buy now, pay later market in recent years.
