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Apple Pay Later nears launch, company will use past spending with Apple to evaluate creditworthiness

Apple Pay Later is nearing a launch in the coming weeks, according to Mark Gurman at Bloomberg. The buy-now-pay-later offering will allow customers to buy something using Apple Pay on their iPhone in four instalments over the course of six weeks. The service is offered for free to customers, with zero interest attached.

Apple will use past spending on hardware and services to evaluate customer creditworthiness. This means customers with a good history of spending on Apple’s devices at retail stores are more likely to be accepted into the buy now pay later service, as Apple will use that as a strong indicator that they will be able to repay the loan.

Other factors that will contribute to the informal credit check include whether the customer has an associated Apple Card credit card,

Apple Pay Later will launch initially in the United States. Customer spending data will be tracked via the user’s Apple ID and the Pay Later option will be surfaced automatically in the Apple Pay purchase sheet, if available.

Apple Pay Later is the first Apple financial service to be backed by Apple itself, not a third party. That means ultimately Apple’s own cash balances are backstopping the loans. You can expect that if a customer defaults on an Apple Pay Later product, they will not be offered the chance to use it again, and other features of their Apple ID may be disabled until their account is back in good standing.

Down the road, Apple may also add alternative payment options that extend loans over longer periods of time, and those will potentially carry interest charges.

Apple Pay Later is currently undergoing a large field test with Apple Store retail employees included in the trial. The feature was originally intended to debut in September 2022 as part of iOS 16, but the service faced delays during development and was indefinitely postponed.

Apple has not officially announced a new launch date for Apple Pay Later, but it is expected to go live soon. The feature is currently dormant in the Wallet app code in iOS 16.3, and Apple has the ability to roll it out with a flip of a backend switch at any time.

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