Apple is planning a ‘buy now, pay later’ service for all purchases | Banking Issues

The upcoming service could convince many users to use their iPhones to pay for items instead of credit cards.

Apple Inc. is working on a new system that would allow consumers to pay for any Apple Pay purchases in installments, in contrast to the “buy now, pay later” offers known as a service from Affirm Holdings Inc. and PayPal Holdings Inc.

The upcoming service, known as Apple Pay Afterwards, will use Goldman Sachs Group Inc. as lenders that may be required in installments, according to those familiar with the matter. Goldman Sachs has been an Apple Card partner since 2019, but the new offerings are not tied to the Apple Card and do not want to use one, say people, who have asked not to be named on the unannounced items.

Purchasing now, later payments can help drive Apple Pay setups and convince more users to use their iPhone to pay for items instead of fixed cards. Apple accepts the number of transactions created by Apple Pay, driving additional revenue to companies with more than $ 50 billion annually in business transactions.

The service is set to work as follows: When a user buys Apple Pay on their Apple device, they will have the opportunity to pay at least four free payments which take place every two weeks, or several months with interest, one person said. The system that pays for four is called “Apple Pay in 4” internally, while long-term plans are called “Apple Pay Monthly Apps.”

By purchasing the Apple Pay Afterward app, users will be able to select any credit card to pay over time. This service is intended to be available on-sale or in online stores. Apple already offers monthly installments via Apple Card to sell its products, but this service will support this expertise on any Apple Pay transaction.

The interest rate Apple seeks to repay on a monthly basis cannot be exceeded. Ensure 30% APR charges, while other defendants pay less. Four interest-free plans could challenge similar practices by Afterpay Ltd, Klarna Bank AB and Sezzle Inc. in addition to the popular PayPal in application 4.

Affirm fell 10% on Tuesday in this regard, while PayPal also received a loss of only 0.6%. Afterpay dropped 9.6% in Sydney Wednesday morning.

Users wishing to use the Apple Pay Post application will need to be approved through the application via the iPhone Wallet app, where they will also be helped to manage their funds. Users will be required to send their local ID type to register the application. Apple will also give customers the ability to withdraw from the payment to pay for the remaining purchases.

Some of Apple Pay’s plans later include payment and billing fees, which only deprive users of the interest to engage with them temporarily. This function is no longer required to run a credit card for the user. Separately, the company is also experimenting with a platform that would allow users to create temporary, electronic cards for Apple Pay Afterwards.

Apple’s new service is still in its infancy and its appearance could be changed or eliminated, people say. Apple and Goldman Sachs spokespersons declined to comment.

Calling for money last Tuesday, Goldman’s Chief Financial Officer Stephen Scherr said he believed there was “a great deal of opportunity for Apple.” Goldman’s alliance with consumer enthusiasts like Apple’s goal is to help secure access to consumer banking – an expansion it has sought in recent years to spread its reach beyond the Wall Street financial world.

Apple’s pay-per-view service is approved by 85% of all US retailers, according to the company. The new project will be one of the biggest additions to the project since its inception in 2014, following in the footsteps of others. Last year Apple acquired a mobile technology company to allow them to earn money by tapping another phone or credit card behind it, adding something to Apple’s billing map.