Apple launches buy now, pay later service

Service will allow users to split purchases into four payments spread over six weeks with no interest or fees

By Reuters

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Published: Tue 28 Mar 2023, 9:17 PM

Apple Inc on Tuesday launched its buy now, pay later (BNPL) service in the United States, a move that is likely to disrupt the financial technology sector dominated by firms like Affirm Holdings and Swedish payments company Klarna.

The service, Apple Pay Later, will allow users to split purchases into four payments spread over six weeks with no interest or fees, the company said.


Users can apply for loans between $50 and $1,000, which can be used for online and in-app purchases made on iPhone and iPad with merchants that accept Apple Pay, according to the company.

"Apple Pay Later will absolutely wallop some of the other players. Other companies would've taken a look at Apple's announcement today because they are an ubiquitous name. This will take a bite out of the market share of other players," said Danni Hewson, head of financial analysis at AJ Bell.


Hewson added that Apple Pay Later will be a disruptor as consumers are looking for the easiest way to get what they want, as their wallets have been stretched by inflation.

In 2020, pandemic-related lockdowns turned shoppers to online payment platforms, bolstering demand for fintech companies offering BNPL services, especially to millennials and Gen Z customers.

Digital payments behemoths including PayPal Holdings Inc and Block Inc have expanded into the sector through acquisitions, while Affirm went public in a multi-billion dollar listing.

The sector's fortunes have since turned amid rising interest rates and red hot inflation, that have together dampened purchasing power and forced consumers to tighten their purse strings.

Apple Pay is accepted by over 85% of U.S. retailers, the company said.

BNPL firm Affirm Holdings Inc's shares fell more than 7%, while PayPal was down about 1.5% in midday trading.

Apple Pay Later is enabled through the Mastercard Installments program, the company said, adding that Goldman Sachs was the issuer of the Mastercard payment credential.

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