Apple is working on a service that will let users pay for purchases in instalments in partnership with Goldman Sachs.
With the aim to offer additional financial services through its Wallet app, Apple is launching a BNPL product allowing consumers to shop and pay for it over a period of time.
Apple Pay users will get an option to spread payments for their purchase across four interest-free payments made every two weeks, or across several months with interest.
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.
Apple has previously offered monthly instalment payments with no interest on some of its products bought through the Apple store with an Apple Card. For example, Apple Card holders can buy an iPhone in 24 monthly instalments, with the payments being bundled into the minimum credit card payment inside the Wallet app.
“One of the things we are doing is trying to make it simpler and simpler for people to get on these sort of monthly financing kind of things,” Apple CEO Tim Cook said in 2019 when introducing the program.
In May, Apple posted a job looking for a lead negotiator who would work with payment partners, which listed BNPL experience as a plus.
As a feature, Apple Pay Later may compete with BNPL companies like Affirm and Klarna. The immediate effect of the Apple-Goldman Sachs news was a 15% drop in Affirm’s stock price.
The BNPL industry has boomed over the past year due to a pandemic-driven surge in online shopping that has also attracted the attention of mainstream firms such as PayPal which launched its BNPL service in Australia, taking the fight to Afterpay on its home turf.
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