Apple handles loans for its pay later service itself

Apple handles the loans for its new Apple Pay Later service itself. The feature allows purchases to be split into four payments. The iPhone maker is taking a new step in the field of financial services with the service.

A new Apple subsidiary, called Apple Financing , will handle credit checks and loan decisions for Apple Pay Later, American media report. Apple announced the new feature of its Apple Pay payment service this week during the WWDC developer conference .

Apple Pay Later will appear in the Apple Wallet this fall after the update to iOS 16 . Initially, Apple Pay Later is only available in the US, but Apple wants to expand the service to other countries later.

With Apple Pay Later, customers can split each Apple Pay purchase into four equal payments over six weeks. Users do not pay interest or additional costs.

Apple is doing more financial tasks itself

With the new service, Apple will, according to Bloomberg, ‘carry out important financial tasks itself for the first time, such as loans, risk management and credit assessments’. Until now, Apple has partnered with banks and third-party credit processors such as Goldman Sachs for financial services, such as the Apple Card credit card.

Apple is also developing its own payment processing system and is working on new features around fraud analysis and interest calculation, according to Bloomberg. An internal risk assessment system takes into account consumers’ history as Apple customers, such as whether their credit card has ever been declined on the App Store.

Longer terms

Apple is also working on a “buy now, pay later” program for longer-term payments, which Bloomberg reports will be called “Apple Pay Monthly Installments.” With that offer, Apple would collaborate with other companies, such as Goldman Sachs, while this does not happen with Apple Pay Later.

Hardware subscription

In addition to the pay-later service, Apple would also like to use its internal financial systems for an upcoming hardware subscription for, for example, the iPhone and iPad. Instead of purchasing devices, Apple customers pay a monthly fee for the use of the devices. It is not yet known when Apple will offer the first hardware subscriptions. 

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