Apple is entering the buy now, pay later (BNPL) market with adjustments to the existing model, planning to launch the service for some customers this spring and report loans to credit bureaus in the fall. The BNPL option has gained significant popularity since the beginning of the pandemic, particularly among young and low-income consumers who may not have easy access to traditional credit.
Companies such as Afterpay, Affirm, Klarna, and PayPal already provide BNPL services, typically involving late fees for missed payments and options to use credit cards or bank accounts for installment payments. Apple’s version, integrated with Apple Pay and facilitated by Mastercard, will require consumers to use a debit card and a bank account for payments. Instead of charging flat or percentage-based late fees, missed payments will lead to the eventual loss of access to these loans.
Apple’s BNPL product will also offer fraud and consumer protections through Mastercard’s existing pay-by-installment model, and merchants will be charged fees that are “competitive to other installment products in the market,” according to a Mastercard spokesperson.
Apple’s service will not involve late fees, only the reporting of missed payments to credit bureaus and the potential loss of access to loans. If users wish to defer payments or set up a different payment plan, they can contact Apple support.