Sorry, iPhone users. Your wallets are about to take a huge hit.
Apple is reportedly working on a version of a “buy now, pay later” service that uses Apple Pay. Anonymous sources told Bloomberg that the service, internally called Apple Pay Later, will let you use Apple Pay to buy stuff and spread the payments out over four interest-free payments every two weeks. (You can choose a lengthier pay-off period, but you will have to pay interest.)
While Apple Pay Later wouldn’t require you to get an Apple Card, it will reportedly require you to apply for approval via the Wallet app. Like the Apple Card, Apple Pay Later is reportedly a partnership between Apple and Goldman Sachs. Being approved for the service would require submitting a copy of a local ID card, but not a hard credit check. As with the Apple Card, payments would be managed through the Wallet app.
The rumored features also are similar to those currently offered by Affirm Holdings, PayPal, Afterpay, and other “pay later” services. For instance, Apple’s version would also eschew late and processing fees, as well as allow users to create a temporary Apple Pay Later card for a single purchase. It would also be available both in-store and online.
This isn’t the first time Apple’s dabbled with financing. For instance, you can currently use the Apple Card to buy Apple products in monthly installments at 0% interest and 3% cashback. However, financing this way is limited to Apple’s own products. Apple Pay Later would smash down the door to other purchases, while also making Apple Pay as a service more useful and convenient.
You have to admit: This is both evil and genius. For starters, Apple gets a cut of every Apple Pay transaction. Contactless payments also proved to be much more useful during the pandemic, and Apple purports that Apple Pay is now accepted at more than 85% of retailers. In iOS 15, Apple’s also expanding on its digital wallet features by adding the ability to store ID cards, hotel keys, and even digital car keys. And while many of us cringe at the idea of consolidating everything into our phones, plenty of others will embrace that extra level of convenience. By expanding Apple Pay to finance non-Apple products, you’re just encouraging more people to try Apple Pay if they haven’t already.
Ultimately, Apple Pay Later sounds like giving folks wary of signing up for an Apple Card a little taste of how convenient managing payments from your Wallet can be. If you need it in a pinch and like it, you’re more likely to use it again. The more you use it, the less resistance you have to signing up for an Apple Card. It doesn’t end there either. If you love the convenience but want to spend less time on your phone, you might then be tempted to get an Apple Watch. Any way you slice it, Apple’s figured out a way to double-dip and keep people hooked on its ecosystem of services and products.
Granted, this isn’t official yet. Apple could still scrap it entirely or alter how the whole thing works. But if it does come out and is even remotely successful, you can bet that Google and Samsung won’t be too far behind.