Apple’s new Apple Pay Later feature utilizes in-house lending


Apple made the announcement alongside the release of iOS 16 and macOS Ventura. The new Apple Pay Later feature will enable users to split the cost of an Apple Pay purchase into many instalments when it becomes available in the near future.

Apple Pay Later allows customers to stretch out four payments over a six-week period instead of paying in full at the time of purchase. Apple Pay Later does not charge interest or fees if customers make all four payments within the allotted time frame.

In the past, Apple has worked with Goldman Sachs and other financial institutions, but Bloomberg reports that the company now aims to handle all of the loans for the Apple Pay Later function on its own. An Apple subsidiary, Apple Financing LLC, will handle credit checks and loan approvals for the program, which was launched earlier this year.

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It’s the first time Apple has chosen to handle its own finances, and Apple Financing LLC is a different company from Apple. As Apple Financing does not have a bank charter, Goldman Sachs nonetheless plays a part in the business by issuing the Mastercard payment credential used to complete Apple Pay Later purchases.

Earlier this year, Bloomberg reported that Apple was working on a multi-year strategy to bring its financial services in-house, eliminating the need for partners such as Goldman Sachs. For example, Apple is working on tools for calculating interest, approving transactions, submitting data to credit agencies and boosting credit limits, as well as tools for lending risk assessment, fraud analysis, and credit checks, as well as dispute handling. In addition to the Apple Pay Later functionality, the company may use Apple Financial to manage other services, such as the hardware subscription service that is currently in development.

Apple Pay Later has been in development for more than a year, and it is comparable to PayPal’s Buy Now, Pay Later function, which also enables payments to be broken down into instalments. Apple Pay Later can only be used in the United States at this moment.

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