Apple’s Pay Later service is apparently now just a few weeks away for US customers, but rumors suggest the tech giant will have you clear some major hurdles before you get financial help.
The Pay Later service, announced in June 2022 but still in testing, lets you split any Apple Pay purchase into four zero-interest payments over six weeks. But Bloomberg (opens in new tab) says you need to prove “you’ve been a good customer in the past” based on your spending history and “even what company devices” you own.
Apple will also apparently check “whether customers have applied for an Apple Card credit card” and what other cards are associated with their Apple Pay accounts. In other words, you need a good credit score and preferably a solid track record of buying things from the Apple Store to access Apple’s “buy now, pay later” service (often referred to as “BNPL”) .
The need to qualify for BNPL credit is nothing new, but it’s less common to prove you’ve been a good customer of a tech giant like Apple. Apple Pay Later is important because it’s the first time Apple will use its own in-house payments platform, making it a full-fledged financial services company.
Apple Pay has not been without controversy, with Apple currently embroiled in talks with EU antitrust regulators (opens in new tab) due to a charge that it has restricted access to third parties who want to develop mobile wallet services for iOS devices. But more important to existing iPhone owners will be the financial help that Pay Later promises to bring – which is unfortunately quite limited.
Pay Later, available only in the US at launch, lets you split Apple Pay purchases into four equal payments over six weeks, with no interest or fees. According to Bloomberg, you are simply asked how much you want to borrow in the Apple Pay app and you get an approved amount back.
While that may be useful for those looking to spread the cost of an expensive purchase (for example, an Apple MacBook Pro 16-inch (2023)) over a number of credit card billing cycles, it doesn’t really improve the existing options. from, for example, Paypal or Affirm (which offer 0% interest over longer periods).
Analysis: Welcome to the Bank of Apple
It’s a sign of the times that Apple’s biggest area of expansion and innovation in 2023 will seemingly be in financial services, rather than the products that have made it the world’s most valuable company.
We recently heard rumors that Apple’s iPhone subscription service is still out and about despite delays, and it now appears that Apple Pay Later could be launching soon as well. Both services are in response to a cost-of-living crisis that has put Apple products out of reach for many. But they’ll also be a handy financial boost for the tech giant, which gets a small discount on every Apple Pay transaction.
Some of that Apple revenue could take a hit if the EU indeed rules that the tech giant stops rivals from gaining a foothold in its iOS mobile wallet, with a potential fine reportedly as high as $39 billion (opens in new tab). But Apple will likely remain undaunted to continue the mobile payment buzz — and that’s good news for Apple Pay fans who have been waiting for the Pay Later service to launch.
It’s a shame Pay Later’s interest-free loans aren’t offered for more than six weeks – as you also don’t have to pay it off until two weeks after purchase, this could limit its early popularity.
But the move to a full-fledged financial lender, with Apple apparently creating a separate company to handle approvals, is huge for the company, so it may just start off cautiously. With the service being tested with employees over the past few months, Bloomberg says Apple Pay Later should appear “in the coming weeks.” In the meantime, prepare by checking out our guide to the best personal finance software.