Apple has launched its long-awaited buy now, pay later (BNPL) service option for Apple Wallet, called Apple Pay Later. Apple Pay Later Focus on Privacy and Consumer Financial Health. The service will initially be available to select users with plans to offer it to all eligible users in the coming months. The launch has been delayed for six months, and it comes as the BNPL space faces regulatory concern over privacy issues.
Apple Pay Later Focus on Privacy
Apple also addressed regulatory concerns over privacy and security related to its new BNPL product. Transactions and loan history are never shared or sold to third parties for marketing or advertising. Apple Pay Later purchases are authenticated using Face ID, Touch ID, or passcode.
Regulators’ top concern was how Apple and other big fintech companies looking to offer BNPL services would use customer data. The Consumer Financial Protection Bureau (CFPB) plans to issue guidance or rules that would bring the sector in line with the standards established for credit cards by Congress, as it does not currently oversee BNPL providers.
Apple Pay Later aims to provide users with more flexibility and responsible borrowing options. The service’s focus on privacy and security and the absence of fees and interest could help address concerns in the BNPL industry about consumer financial health. Apple’s entry into this space could also lead to increased scrutiny from regulators on BNPL providers, as they seek to establish guidelines and standards for the sector.
Apple Pay Later Offer Flexible Payment Options for Consumers
Apple Pay Later enables users to split the cost of their purchases into four interest-free payments spread over six weeks, which addresses regulatory concerns about consumers taking on more debt than they can handle. Consumers can apply for Apple Pay Later loans ranging from $50 to $1,000, which can be used for online and in-app purchases made on iPhones or iPads with merchants that accept Apple Pay.
The Vice President of Apple Pay Jennifer Bailey said that providing flexible payment options to its users is vital because people have different ways of managing their finances.
Managing Loans with Ease
Apple Wallet makes it easy for users to access their loan activity, view the total amount due, and track and plan their payments. Users will also receive notifications via Wallet and email before the payment is due, and a preventative measure to help users from taking on more debt is that they must link a debit card from Wallet as their loan repayment method. They won’t be accepting Credit cards as a loan repayment method.
Apple Pay Later Has No Fees or Interest
Apple Pay Later has no fees and no interest, and it is designed to help consumers make informed and responsible borrowing decisions. The BNPL space has come under regulatory scrutiny over concerns that these products may encourage consumers to make poor financial decisions, such as spending more than they can afford without credit options.
BNPL borrowers are also more likely to suffer financial distress than non-borrowers and to use products like overdraft, payday, pawn, and auto title loans which are of high interests.
