CUPERTINO, Calif.–Apple has become the latest to get in on the “buy now, pay later” payments trend.
The company is reportedly working on a new service that will let consumers pay for any Apple Pay purchase in installments over time and is currently known internally as Apple Pay Later.
According to Bloomberg, the service will use Goldman Sachs Group as the lender on the loans or the installment offerings. Goldman Sachs has been Apple’s partner for the Apple Card credit card since 2019, but the new offering isn’t tied to the Apple Card and doesn’t require the use of one, sources told Bloomberg.
“The buy now, pay later system could help drive Apple Pay adoption and convince more users to use their iPhone to pay for items instead of standard credit cards,” Bloomberg reported. “Apple receives a percentage of transactions made with Apple Pay, driving additional revenue to the company’s more than $50 billion per year services business.”
How it Works
According to Bloomberg, the service is currently planned to work as follows: When a user makes a purchase via Apple Pay on their Apple device, they will have the option to pay for it either across four interest-free payments made every two weeks, or across several months with interest, one of the people said. The plan with four payments is called “Apple Pay in 4” internally, while the longer-term payment plans are dubbed “Apple Pay Monthly Installments.”
When making purchases through an Apple Pay Later plan, users will be able to choose any credit card to make their payments over time. The service is planned to be available for purchases made at either retail or online stores, Bloomberg reported.
The report added that users who want to use the Apple Pay Later service will need to be approved via an application submitted through the iPhone’s Wallet app, where they will also be able to manage their payments. Users will need to submit a copy of their local ID card to apply for the program. Apple will also offer customers the ability to exit payment plans to pay off the remainder of their purchase balance, Bloomberg said.
No Credit Check
“At least some of the Apple Pay Later plans will also exclude late fees and processing fees, only costing users interest for longer-term plans,” Bloomberg said. “The service will also not require running a credit check on the user. Separately, the company is also testing a feature that will let users create temporary, digital Apple Pay Later credit cards for individual purchases.”
Apple’s new service is still in development and its features could change or be canceled, sources told Bloomberg.