Apple announces the expansion of Apple Pay with the Buy Now, Pay Later option at its latest Worldwide Developers Conference.
SEE ALSO : Overcoming fraud challenges in the Buy Now, Pay Later space
Buy Now, Pay Later option will be integrated into the Apple Wallet and will be available for use on any Apple Pay purchase. Customers will be able to split the cost of a purchase into four equal payments over the course of four months, with no interest or fees.
Borrowers would be subjected to a light credit check to guarantee that they are capable of repaying the loans, which will most likely be restricted at USD 1,000. In the case that Apple Pay Later loans are not repaid, Apple will stop extending credit to those users.
Apple has collaborated with Mastercard, which talks with vendors and provides Apple with a white label BNPL product called ‘Installments’. Goldman Sachs, which issues Apple Cards, is also involved as the technical issuer of the loans and the official BIN sponsor. However, Apple does not use Goldman’s credit determinations or balance sheet to grant loans.
Apple will compete with several other similar fin-tech businesses with the launch of Pay Later, including PayPal, Block, Klarna, and AfterPay, some of which saw their stock prices plummet after Apple’s announcement.
SEE ALSO : Buy Now, Pay Later 2.0 has arrived: Live Now, Pay Later
The global BNPL market is predicted to reach USD 39.41 billion by 2030, with retail products, especially fashion, accounting for the greatest market share last year.This growth is owing to an increase in consumer spending on daily essentials and more payment options offered by retailers.