What are the Details Behind Apple’s Forthcoming ‘Buy Now, Pay Later’ Service?

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What are the Details Behind Apple's Forthcoming ‘Buy Now, Pay Later’ Service

Apple Inc. is working on a new service that will let consumers pay for any Apple Pay purchase in installments over time, rivaling the “buy now, pay later” offerings popularized by services from Affirm Holdings Inc. and PayPal Holdings Inc. Watch below for more details on the upcoming offering.

“The interesting part here is you can use any credit card that you have in Apple Pay already.”

Host: Apple is working on a new service that will let consumers pay for any Apple Pay purchase in installments over time. This would rival the buy now, pay later offerings popularized by services from the firm to PayPal. The service will use Goldman Sachs as the lender for the loans needed for installment offerings. I want to bring in Bloomberg’s Mark Gurman, who broke this story. Mark, how will this work?

Gurman: Yeah, thank you for having me. So you’ll be able to, when this eventually launches, sign up for this, like you said, Apple Pay later service. And the way it’ll work is you’ll go to a store or make an online purchase. And let’s say it’s $100. And if you’re part of this Apple pay later program, you’ll have two options. One option will be called Apple Pay in four. So what that allows you to do is split that $100 up into four no interest installments of $25. Right so you’ll have to pay $25 four times every two weeks. So it’s an eight week interest free program. The other program is called Apple Pay monthly installments. This is a longer term program. If you make a sizable purchase, thousands of dollars that you want to pay for through Apple Pay over several months. In that case, Apple will charge interest in APR and Goldman will be the one handling that and the lender for those scenarios as well.

Host: Interesting, Mark, if you have an iPhone, I’m sure you’ve noticed it’s increasingly easier to just use Apple Pay and make a purchase with zero friction, really. And I wonder what some of these other companies, like affirm and PayPal, are going to have to say about it.

Gurman: Yeah, this is definitely going to be a new layer in Apple pay, so the interesting part here is you can use any credit card that you have in Apple Pay already. You don’t need to use an Apple credit card with Goldman. You don’t need to do a new credit application or anything like that. So it’s going to be so seamlessly integrated that I’m not entirely sure why an iPhone user with Apple Pay wouldn’t use this service over the competitors like affirm, PayPal and others existing today.

Host: Right because with some of those services, you do get an additional credit check, which sometimes can impact your credit score. Obviously, it’s great that Apple is making this easier for users, but I find it interesting that they’re doing this in the midst of, you know, this antitrust scrutiny on how they run the Store and Apple Pay in particular.

Gurman: You know, the interesting thing to me in reporting this out is that Apple’s terms are essentially identical to affirm to PayPal. This pay in four installments is essentially… actually, it is the same interest free plan that every one of these competitors use. So it’s not like Apple is beating them in any sort of functionality. So they are a true competitor. It’s not like they’re going overboard or doing, you know, better deals than the competitors. So I think that will give them more safe ground.

*Bloomberg contributed to this content

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