Apple’s delayed Buy Now Pay Later plan, now referred to as Apple Pay Later, was first introduced by the tech giant in June 2022. Despite facing multiple setbacks and hiccups, the company has still confirmed that it is proceeding with the development of this financial product, with plans to launch it later in 2023, but an exact date has not been specified. The service will be integrated into Apple Wallet and accessible through both online and in-app transactions. Based on Mastercard’s network, users will have a transparent view of their payment amounts and due dates.
Apple’s entry into the financial services sector with this product is part of its larger strategy to offer a comprehensive range of offerings to its customers, in addition to its widely popular hardware such as the iPhone, iPad and Mac. The company has already made steps in this direction with the launch of Tap to Pay on iPhone in February 2022, which was aimed at supporting small businesses. The NFC technology used in Tap to Pay securely processes transactions, and is now available through the iOS apps for PayPal and Venmo, offering merchants more payment options beyond just cash.
Buy now pay later plans, or BNPL, have become increasingly popular in recent years, as consumers look for more flexible payment options that allow them to purchase high-cost items without having to pay the full amount upfront. With Apple Pay Later, users will have the option to make early payments to clear any outstanding balances, with the company claiming that the tool is designed to prioritize their financial well-being.
Pros of Buy Now Pay Later (BNPL) schemes like Apple Pay Later include:
- Flexibility: BNPL schemes allow consumers to purchase high-cost items and spread the cost over a longer period of time.
- Convenience: BNPL schemes are integrated into digital wallets, making it easy for consumers to keep track of their payments.
- Improved Financial Health: BNPL schemes often provide consumers with a clear view of their payment amounts and due dates, helping them to manage their finances more effectively.
Cons of BNPL schemes include:
- Higher Costs: BNPL schemes can often be more expensive than traditional payment methods, as they charge interest and other fees.
- Credit Risk: BNPL schemes can put consumers at a higher risk of overspending and falling into debt.
- Limited Availability: BNPL schemes are often only available to consumers with good credit scores, leaving out those who need it the most.
While BNPL schemes are popular for their flexibility and convenience, they also come with potential risks and higher costs. Whether Apple Pay Later will be a success or not remains to be seen, but the company’s entry into the financial services industry highlights the growing demand for more flexible payment options.
