Apple Launches ‘Pay Later’ Feature, but the Tech Community is Not Happy!
Apple is getting into the “buy now, pay later” (BNPL) business with its new Pay Later service built into Apple Pay and Apple Wallet. The iPhone maker announced plans to launch Apple Pay Later, which would allow users to pay for things over monthly installments without interest. It aims to get consumers to pull out their iPhone, rather than a credit card, for store purchases, and also enables consumers who shop with Apple Pay to split purchases into four payments every two weeks. An Apple subsidiary has obtained lending licenses in most states to offer the new payment plan, called Apple Pay Later.
Apple’s Buy Now, Pay Later Service
Apple’s Pay Later service has been in the works since at least last year. There’s no interest on these installments, but it remains unclear if Apple will charge a late fee, and if so, how much it will cost. BNPL services seem harmless, as some come with no interest and allow for an easy way to pay back a big purchase in chunks.
Major BNPL players such as Affirm and Klarna started off by partnering with online and app-based retailers and are in the process of rolling out debit cards linked to installment plans that extend BNPL’s reach everywhere debit cards are accepted. A triple whammy of rising inflation, higher interest rates, and slowing economic growth has put the industry’s future in doubt. Apple’s entry is a “great indicator” of demand for BNPL.
BNPL services can incur overdraft fees if users charge them through an account with insufficient funds, and Apple’s fine print makes clear it’s no exception. In an interview, Apple’s Chief Financial Officer Michael Linford said that Affirm has spent years building a vast merchant and e-commerce network—including deals with Amazon.com and Shopify. Apple’s brand puts Pay Later at odds with the company’s goal of providing customers with technology and services they can generally feel good about.