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How does Apple’s Buy Now Pay Later service work?

How does Apple’s Buy Now Pay Later service work?

New York (CNN) – Apple launched an option in its digital wallet on Tuesday that allows customers to pay for their online purchases in instalments, becoming the latest company to embrace the buy-now-pay-later trend.

The new functionality, called Apple Pay Later, allows customers to split the payment for their purchase into four installments over a six-week period, with the first installment to be paid at the time of purchase. Apple users can also request a loan in the Wallet app, between $50 and $1,000, without interest or commission, to make online or in-app purchases.

according to launch For the company, the payment option will be available to select US users and is scheduled to be offered to all eligible customers in the coming months. manzana He announced this feature last year.

Apple’s decision comes at a time when more and more consumers are turning to delayed purchase services to stretch their budgets amid rising inflation and general economic uncertainty. Other popular services that offer the same payment option are Affirm, Klarna, and Afterpay.

But some economists and consumer advocates have raised concerns that these services could push shoppers deeper into debt.

The installment payment process makes it look as if someone pays almost nothing for the good or service they’re buying, Terry R. Bradford, payment systems research specialist at the Kansas City Federal Reserve, previously told CNN. “So the possibility is that you could, in your mind’s eye, think of everything you buy in those four installments and, as a result, put yourself in more debt than if you had to pay it all off each time.”

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But Apple says the new feature is “designed with users’ financial health in mind.”

Credit: Apple

“There is no one-size-fits-all approach when it comes to how people manage their money,” Jennifer Bailey, vice president of Apple Pay and Apple Wallet, said in a statement Tuesday. “Many people are looking for flexible payment options, so we’re excited to introduce Apple Pay later to our users.”

Apple users will be able to track and manage upcoming loan payments in the Wallet app. According to the company, any loan request can also be submitted on the app without any credit impact.

The Apple Pay Later option is enabled through the Mastercard installment program.

— CNN’s Alicia Wallace contributed to this report.