Apple announces 'Pay Later' service; check here for details

Apple Inc plans to fund loans for its forthcoming Apple Pay Later service off its corporate balance sheet, the company said

AgenciesUpdated: Thursday, June 09, 2022, 01:39 PM IST
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The service was announced earlier this week at the 2022 Worldwide Developers Conference, and will initially be launched in the United States later this year." /Representative logo |

Apple Inc plans to fund loans for its forthcoming Apple Pay Later service off its corporate balance sheet, the company said on Wednesday, according to Reuters. It has designed the feature with “users' financial health in mind”, accordint to the report.

The service was announced earlier this week at the 2022 Worldwide Developers Conference, and will initially be launched in the United States later this year.

Apple said its treasury department will decide the exact mechanism it will use to fund the loans and funding sources may shift over time. Loans and creditworthiness decisions will be handled by a wholly owned subsidiary, Apple Financing LLC., the report said.

How it works

Apple announced the pay-later service this week, offering to split purchases up into four equal payments over six weeks.

Apple’s pay-later loans will have zero interest and no fees of any kind.

To use the pay-later service, Apple customers will have to connect a debit card to their Apple Pay account to fund repayment of the loans.

Pay Later will be built into the Apple Wallet and eligible for use on any purchase made through Apple Pay.

A quarter of the purchase price for approved loans will be due at the time of purchase, and, like other debit card transactions, Apple will run an instant check to ensure there are sufficient funds to cover the upfront payment.

Customers will be able to split the cost of a purchase into four equal payments spread over a period of four months.

To judge creditworthiness, Apple said it plans to use a soft pull of a customer’s credit and other data, such as the customer’s purchase and payment history with Apple in both its stores and online services such as the App Store.

Service to launch later this year

Apple will offer the loans anywhere that Apple Pay is accepted, both online and in physical retail stores.

The payments to merchants will be made over the MasterCard network through a payment credential issued by Goldman Sachs Group Inc, Apple said.

The Buy-Now-Pay-Later service will launch later this year. This will be done along with Apple’s latest operating systems for iPhones and iPads and will put it into competition with existing buy-now, pay-later firms.

Apple Financing LLC has lending licenses in all U.S. states where such pay-later services are allowed, it added

(With inputs from Reuters)

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