Apple has announced a major update to Apple Pay called Apple Pay Later, which will allow consumers to break down the cost of an Apple Pay purchase into four equal payments without interest or late fees. The new financial service — which was anticipated ahead of its debut at Apple’s 2022 Worldwide Developers Conference (WWDC) — is the company’s entrance into the huge and ever-growing buy now, pay later (BNPL) market.
Apple Pay Later is a service that allows you to make payments at a later date, with no effort from the developer or merchant side. It works everywhere Apple Pay is accepted in the United States, both in apps and on the internet — it necessitates no further work from the developer or merchant side. Payments can be booked, tracked, and managed using the Apple Wallet app on iOS.
Apple Pay Order Tracking, which allows merchants to provide receipt and order tracking to Wallet, accompanied the debut of Apple Pay Later. It’s connected with Shopify, according to Apple, and — like Apply Pay Later — requires no additional integration.
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What is Apple Pay Later?
Apply Pay Later will provide loans for the installment plans to Goldman Sachs, similar to Apple’s credit card program, according to a Bloomberg story last year. According to the report, customers who make an Apply Pay Later purchase would choose to make four interest-free payments every two weeks or pay over time with interest.
Nonetheless, Apple Pay Later will compete with PayPal BNPL services, Affirm, Klarna, Sezzle, and various alternatives. Grand View Research predicts that the BNPL will be worth $39.41 billion in 2030, making it a lucrative target.
The BNPL remains a popular service among customers. According to one poll, more than 51% of Americans had used a BNPL service by March 2021. Accenture predicts that the number of BNPL users in the United States will be 45 million in 2021.
However, BNPL products are facing increasing regulatory scrutiny, with some regulators contending that the business model is overly hazardous. Over a third of respondents who used BNPL plans and took advantage of them in a Credit Karma poll said they had fallen behind on their obligations.
In December, the United States’ Consumer Financial Protection Bureau launched an investigation into BNPL credit. California sued Afterpay for failing to obtain a lender’s license after initially refusing to do so. Massachusetts officials reached an agreement with Affirm after allegations that it provided loan servicing services without a license, as did the New York Department of Financial Services (NYDFS) and the Illinois Securities Division (ISD).