Apple at the Worldwide Developer Conference 2022 (WWDC 2022) back in June announced the launch of Apple Pay Later, a new financing feature. The multi-trillion-dollar company disclosed that the new feature would launch alongside the iOS 16 in September 2022. Apple also announced other exciting features, including lock screen customization, video texting, editing of sent messages, etc.
About Apple Pay Later service
The launch of Apple Pay Later next month enables Apple users to spread the cost of a purchase into four equal payments over a six weeks period, paying no interest. Reports say Apple is financing this service with $200 billion.
Apple’s entrance into the “buy now pay later” (BNPL) space is coming when retailers are embracing BNPL apps such as Affirm, Klarna and Afterpay.
Why this matters
Apple’s Pay Later service is launching when the global inflation rate is biting hard on households. Financial reports from the UK showed an inflation rate of 9.1% in May 2022, representing a 40-year high while the United States also announced an inflation rate of 9.1% representing the highest rate in 41 years.
What this means
Now, not only would this make Apple one of the biggest companies offering the BNPL service, the company poses a tremendous threat to existing companies in the BNPL space. In fact, Klarna, one of the existing companies in the BNPL space, after Apple made the announcement, fell from a $45 billion valuation to $7 billion representing a 85% fall.
What you should know
An already existing service by the company is Apple Pay. Apple Pay is a service that allows Apple users to store their debit and credit cards in order to make purchases online or at businesses in real time.
Apple Pay Later would be active in any part of the world where Apple Pay is acceptable through apps or online. This means that the service may not be available for payment in physical stores. Retailers that use Apple Pay need not implement any change to receive payments as transactions will occur as usual. The only difference will be in the back-end payments.
Apple did not limit Apple Pay Later to Apple products alone, Apple specified that as long as the users connect the Apple Card to Apple Wallet, Apple users could finance other purchases.