Apple Pay Later, a major improvement to Apple Pay that allows users to split the cost of an Apple Pay transaction into four equal payments over six weeks with no interest or late penalties, was announced today by Apple. Apple’s new financial product, which was predicted before of its unveiling at Apple’s 2022 Worldwide Developers Conference (WWDC), represents the company’s entry into the massive and rapidly increasing buy now, pay later (BNPL) market.
Apple Pay Later is available anywhere, thanks to the Mastercard network. Apple Pay is now accessible in the United States, both in applications and on the web, and requires no additional effort on the part of developers or merchants. The Apple Wallet app on iOS can be used to make, track, and manage upcoming payments.
Apple Pay Order Tracking, which enables retailers to give receipt and order tracking to Wallet, is launching alongside Apple Pay Later. According to Apple, it’s integrated with Shopify and, like Apply Pay Later, doesn’t require any further integration.
Similar to Apple’s credit card option, Apple Card, Company confirmed last year that Apply Pay Later would employ Goldman Sachs as the lender for the loans needed for the instalment offerings. Customers making an Apply Pay Later purchase would have the option of making four interest-free payments every two weeks or making several monthly payments with interest, according to the source — although that didn’t quite pan out, if the announcement at WWDC is any indication.
In any case, Apple Pay Later will compete with BNPL services from PayPal, Affirm, Klarna, Sezzle, and a slew of other companies. Last August, Amazon announced a partnership with Affirm to offer a BNPL option, and just last week, Affirm announced a partnership with Stripe to offer its technology to U.S. businesses who use Stripe’s payments system.
According to Grand View Research, the BNPL might be worth $39.41 billion by 2030.
BNPL, for example, continues to be extremely popular among consumers. According to one survey conducted in March 2021, more than 51% of Americans had tested a BNPL service. According to Accenture, the number of BNPL users in the United States will reach 45 million by 2021.
However, regulators are increasingly examining BNPL products, with some claiming that the BNPL business model is overly dangerous. In a Credit Karma poll conducted last year, more than a third of those who had used BNPL programmes said they had fallen behind on payments.
The Consumer Financial Protection Bureau of the United States started an investigation into BNPL credit in December. Afterpay, a BNPL provider, was sued by California for originally refusing to get a lender’s licence from the state. Affirm agreed to a cooperation agreement with Massachusetts regulators after charges that company participated in loan servicing business without a licence.
The BNPL market has recently taken a hit as investors retreated in the face of rising interest rates and a slowing global economy. Affirm’s shares had dropped 70% this year as of the end of trading on May 31. Klarna, on the other hand, recently laid off 10% of its workforce.