The majority of companies who offer “buy now, pay later” services utilize third-party credit records to determine if they can afford to extend credit to new and existing clients, AppleInsider says.
In light of Apple’s arrival in the area, it is expected that the company will go beyond the customary tests.
Apple Financing LLC, a new subsidiary launched for Apple Pay Later, gives the company more control over the program.
However, because Apple Card is a wholly-owned subsidiary, Apple is able to offer the subsidiary with information that would not necessarily be provided to a third-party organization. One example of this is Apple’s current relationship with Goldman Sachs, which is related to Apple Card.
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It has been reported by The Wall Street Journal that in addition to using established credit check systems, Apple Pay Later would also make use of the company’s own platform in numerous ways.
This includes the usage of Apple ID data to validate the user’s identity and to prevent fraud.
Applicants who have Apple IDs that have been in good standing for an extended period of time and who do not appear to have any signals that they will commit fraud will have a greater chance of being accepted for the service.
As a result of its practice of conducting checks on its own using data that it directly handles, Apple has gained the confidence to become a lender on its own rather than deferring to a third-party entity.
Sources claim that when Apple decided to create the Apple Car, the company was concerned about the reputational risk of becoming a lender. As a result, the company decided to form a partnership with Goldman Sachs.