In June 2022, Apple announced the launch of its new Buy Now Pay Later (BNPL) service called Pay Later. With this service, users can now purchase items and pay for them over time without any interest charges or fees. This move marks Apple’s latest step into the financial services industry and brings the company closer to becoming a full-fledged bank.

Apple has been slowly building its financial services offerings over the past few years. In 2019, the company launched the Apple Card, a credit card that can be used with Apple Pay and comes with features such as cashback rewards and budgeting tools. Apple also offers a mobile payment service called Apple Pay, which allows users to make contactless payments using their iPhones.

With the launch of Pay Later, Apple is now offering a BNPL service that allows users to split the cost of their purchases into four interest-free payments. The service is available to users of the Apple Card and is integrated with the Wallet app. Pay Later is similar to other BNPL services such as Afterpay and Klarna, which have become increasingly popular in recent years.

According to Lina Seiche, a fintech analyst and author of the Fintech Pulse newsletter, “Apple is not just a tech company anymore; it’s kind of a bank now.” With Pay Later, Apple is taking on a role traditionally held by banks and credit card issuers. By offering financing for purchases, Apple is further cementing its position as a financial services provider.

Apple’s move into the financial services industry has not gone unnoticed by its competitors. Companies such as Google and Amazon have also launched their own payment and credit services in recent years. However, Apple’s focus on user privacy and security may give it an edge over its rivals. The company has emphasized that it will not share users’ data with third parties and that it will not use the data for targeted advertising.

While Pay Later may be a new offering for Apple, it is not without its risks. BNPL services have come under scrutiny in recent years for potentially encouraging users to take on more debt than they can afford. Some critics have also raised concerns about the impact of BNPL services on users’ credit scores. However, Apple has emphasized that it will conduct credit checks before approving users for Pay Later and that it will only offer the service to users who are able to pay back their debts.

Overall, the launch of Pay Later marks another step in Apple’s expansion into the financial services industry. With its focus on user privacy and security, Apple may be well-positioned to compete with other fintech companies and traditional banks. However, the success of Pay Later will ultimately depend on whether users find the service useful and whether it can generate enough revenue to be a significant part of Apple’s business.

Thank you for taking the time to read this blog. I hope you found it informative and useful. Be sure to follow me on LinkedIn, Twitter, or subscribe for free to my newsletter to stay up-to-date with the latest industry news and insights.

Frank Estrada

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