Apple announced on Tuesday that it has launched its new buy now, pay later service Apple Pay Later in the United States, which will allow customers to split their purchases into four payments without any interests and fees.
Citing the claims of sources familiar with the matter, Bloomberg reported in July 2021 that Apple was working on a BNPL service. The Iphone-maker confirmed the rumors at last year’s Worldwide Developers Conference, saying that it would be launched with a future update to iOS 16. However, according to another Bloomberg report, the company delayed the service until the spring of 2023 due to technical and engineering difficulties.
In a statement on Tuesday, Apple announced that it has started inviting randomly selected users to a prerelease version of Apple Pay Later. While the service will initially be available for a limited number of customers, the tech giant is planning to expand it to all eligible users in the coming months.
Meanwhile, in addition to splitting payments, Apple Pay Later will also allow customers to apply for loans of $50 to $1,000 to be used for online and in-app purchases they make on iPhones and iPads with merchants that accept Apple Pay.
Jennifer Bailey, who serves as Apple’s vice president of Apple Pay and Apple Wallet, said: “There’s no one-size-fits-all approach when it comes to how people manage their finances. Many people are looking for flexible payment options, which is why we’re excited to provide our users with Apple Pay Later. Apple Pay Later was designed with our users’ financial health in mind, so it has no fees and no interest, and can be used and managed within Wallet, making it easier for consumers to make informed and responsible borrowing decisions.”
Given that more than 85% of retailers in the United States accept Apple Pay, the new service could give Apple a significant edge over BNPL companies that already dominate the US market, such as Affirm, PayPal and Klarna.
As reported by Reuters, shares of Affirm dropped by over 7% on Tuesday while PayPal closed the same day around 1% lower.