Upcoming services can convince more users to use iPhones to pay for items instead of standard credit cards.
Apple Inc. is working on a new service that will allow consumers to pay in installments for any purchase of Apple Pay over time, Affirm Holdings Inc. and PayPal Holdings Inc.’s well-known services compete with the “buy now, pay later” offer.
Upcoming services, known as Apple Pay Later, include Goldman Sachs Group Inc. will use it as a loan for the necessary installments, depending on the people who know about the subject. Goldman Sachs has been a partner of Apple on the Apple credit card since 2019, but the new offer is not linked to the Apple card and does not require the use of one, they said people should not be nominated to discuss unannounced products. .
Buy Now, Pay Later systems can help encourage the adoption of Apple Pay and convince more users to use their iPhone to pay for items instead of standard credit cards. Apple receives a percentage of its transactions with Apple Pay, adding to the company’s revenue of more than $ 50 billion a year.
The service is expected to work as follows: When a user makes a purchase through Apple Pay on their Apple device, they will be able to pay through four interest-free payments every two weeks or four months. interest, said one person. A plan with four payments is called an “Apple Pay in 4,” and long-term payment plans are called an “Apple Pay Monthly Fee”.
When purchases are made through an Apple Pay Later plan, users can choose any credit card to make payments over time. The service will be available for purchases at retail stores or online stores. Apple already offers monthly fees through the Apple card to purchase its products, but that service would extend that technology to all Apple Pay transactions.
The interest rates Apple plans to charge for monthly fees could not be learned. Confirm charges up to a 30% APR while other opponents charge less. Four interest-free installment plans Afterpay Ltd, Klarna Bank AB and Sezzle Inc. they would compete with similar systems to companies, in addition to PayPal’s popular Pay in 4 service.
Confirmations fell 10% on Tuesday, and PayPal recovered losses, ending just 0.6%. Afterpay fell 9.6% in Sydney on Wednesday morning.
Users who want to use the Apple Pay Later service will need to accept it through the app submitted via the iPhone Wallet app, where they will also be able to manage payments. Users must submit a copy of their local ID to submit to the program. Apple will also offer customers the option to exit the payment plan to pay the rest of the purchase balance.
Some Apple Pay Later plans will also exclude at least late payment fees and processing fees, excluding users ’interest on long-term plans only. The service also does not require a user credit check. The company is also testing a feature that will allow users to temporarily create Apple Pay Later digital credit cards for individual purchases.
Apple’s new service is still under development and its features may change or be discontinued, people said. A spokesman for Apple and Goldman Sachs wanted to resign.
In a earnings call last Tuesday, Goldman Chief Financial Officer Stephen Scherr said he believes “there could be more opportunities with Apple.” Goldman’s pact with a beloved consumer like Apple is designed to help it find a foothold in the world of consumer banking – an expansion it has sought to expand beyond the big financial world on Wall Street in recent years.
According to the company, Apple’s iPhone payment service is supported by 85% of all U.S. retailers. The new service would mark one of the largest increases in service since its launch in 2014, following other features such as peer-to-peer payments. Apple last year bought a company that developed technology to receive payments by pressing another phone or credit card on its back, adding another potential feature to Apple’s payment roadmap.