Tech giant Apple has thrown its hat in the ring with its buy now, pay later (BNPL) service launch, posing competition to players such as Affirm, Afterpay and Klarna.
The service, which is currently only available on an invite-only basis, will let users split their payments into four installments over six weeks. It will enable eligible users to get loans between $50 and $1,000 for in-app and online transactions that are made using iPhones or iPads at any of the 85% of merchants who currently accept Apple Pay.
“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 a ubiquitous name. This will take a bite out of the market share of other players,” Danni Hewson, head of financial analysis at AJ Bell, told Reuters.
The new flexible payment offering is being managed by the company’s new subsidiary Apple Financing LLC, which will be responsible for credit assessment and lending. Meanwhile, Mastercard Installments enables the Apple Pay Later service, and Goldman Sachs is the issuer of the Mastercard payment credentials.
Apple Financing LLC plans to start reporting Pay Later loans to credit bureaus starting this fall season.
The payment offering is expected to see a broader rollout in the next few months.