Apple is getting into the “buy now, pay later” (BNPL) business with its new Pay Later service built into Apple Pay and Apple Wallet. While Apple bills the service as “designed with users’ financial health in mind,” BNPL is a practice that has come under scrutiny by government regulators as something that could potentially harm customers.
Apple’s Pay Later service, which has been in the works since at least last year, lets users make a purchase with Apple Pay and then pay it back in four equal installments over the course of six weeks. There’s no interest on these installments, but it remains unclear if Apple will charge a late fee, and if so, how much it will cost.
On the surface, BNPL services seem harmless, as some come with no interest and allow for an easy way to pay back a big purchase in chunks. Some BNPL companies have even emerged for payments related to healthcare — with some existing companies, like Affirm, adding support — filling a gap for people who can’t afford to pay healthcare costs upfront. However, this kind of service becomes easy to abuse when used for nonessential purchases.