Apple introduces interest-free payment plan for users with Apple Pay Later

• ByStartupStory     |    March 31, 2023

Apple has launched Apple Pay Later, a new payment system that aims to improve users’ financial well-being by allowing them to divide purchases into four equal interest-free payments over a six-week period. The service is currently available to a limited number of users in the United States, but Apple intends to roll it out to all eligible users in the near future.

Apple Pay Later is a new payment solution from Apple that lets users split purchases into interest-free payments for online and in-app purchases made with merchants that accept Apple Pay. Customers can apply for loans ranging from $50 to $1,000, with no fees and no interest. Jennifer Bailey, Vice President of Apple Pay and Apple Wallet, emphasized that the service was designed to prioritize users’ financial well-being.

Users can apply for loans within the Wallet app without affecting their credit score. The application process involves a soft credit check to ensure users’ financial stability before taking on the loan. If approved, the Pay Later option appears at checkout when using Apple Pay for online and in-app purchases. Currently, Apple Pay Later is available to a limited number of users by invite only, which is sent out at random. The payment service can be used for online and in-app purchases made through iPhones and iPads running iOS 16.4 and iPadOS 16.4. The Wallet app enables users to manage their loans, track total amounts due and upcoming payments. Notifications and email reminders assist users in planning for future payments, and only debit cards are accepted to repay the loans to avoid further debt accumulation.

Apple Pay Later is designed with privacy and security in mind, requiring passcode authentication, Touch ID, or Face ID. Loan and transaction history is never shared or sold to third parties. Apple Financing LLC, a subsidiary of Apple Inc., manages lending and credit assessment, with plans to report loans to U.S. credit bureaus beginning this fall. The Mastercard Installments program enables the new payment solution, ensuring no additional changes are needed for merchants already accepting Apple Pay. The Mastercard payment credential used for Apple Pay Later purchases is issued by Goldman Sachs.

In 2019, Apple introduced the Apple Card, a credit service designed exclusively for Apple customers. The Apple Card, which comes with a physical metal card, provides users with a 3% cashback on transactions, along with 24/7 support and an intuitive spending overview, all conveniently accessible through the Wallet app on iPhones.

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