March 30, 2023
Apple has launched a new service called “Apple Pay Later,” which enables the company to lend money directly to users through the Wallet app on iPhone devices.
The service, which was announced during the Worldwide Developers Conference in June 2022, has now been rolled out for select users through a pre-release version. Apple plans to make the service available to everyone in the coming months.
Users who qualify for the service can apply for loans ranging from $50 to $1,000. However, they can only spend the borrowed money with merchants that accept Apple Pay. Loan repayments will be split into four payments, and users will have six weeks to repay the loans without incurring any interest. Apple requires payments to be made with a debit card.
Apple Pay Later is built on the company’s existing relationship with MasterCard and Goldman Sachs, and the service is “enabled through the MasterCard Installments program.” This allows the service to work immediately with merchants that already accept Apple Pay. Meanwhile, Goldman Sachs acts as the issuer of the MasterCard payment credential used to complete Apple Pay Later purchases.
Apple also formed a subsidiary to finance Apple Pay Later loans, which it did not do with Apple Card or Apple Pay before. This move allows the company to report loans to US credit bureaus starting in the fall of 2023.
To use the service, users initiate a loan request, and Apple performs a soft credit check before making an offer. Once the user accepts the offer, a screen appears on the user’s device outlining the payment plan. The Wallet app also has a screen that allows users to track their loan balance and future payments on a calendar.
The sources for this piece include an article in ArsTechnica.
