Apple Pay Later turns Apple into a full-fledged lender

With today’s limited launch of a new service called Apple Pay Later, Apple will now lend money to users directly through the Wallet app on devices like the iPhone.

We first heard about this service in 2021 and it was officially announced at the company’s Worldwide Developers Conference in June 2022. However, it has faced several delays since the rollout of iOS 16 began last September.

Apple is now “inviting select users to access Apple Pay Later Preview.”The service will be rolled out to everyone “in the coming months.”

Those who can use it now can apply for a $50 to $1,000 loan, but they will only be able to spend the borrowed money at merchants (online or otherwise) that accept Apple Pay.

When users initiate a loan, Apple performs a soft credit check before making an offer. A screen with a payment plan will appear on the user’s device. In addition, the Wallet app has a screen where users can track their credit balance and future payments on a calendar.

Apple Pay Later builds on Apple’s existing relationships with Mastercard and Goldman Sachs; the service is “enabled through the Mastercard Installment Program,”which Apple says allows the service to work immediately with merchants that already accept Apple Pay. “Goldman Sachs is the issuer of the Mastercard payment data used to make purchases through Apple Pay Later,”Apple says.

However, Apple created a subsidiary to fund Apple Pay Later credits – something it hasn’t done before with Apple Card or Apple Pay. This subsidiary will start reporting loans to the US credit bureaus this fall.

As smartphone adoption has slowed somewhat of late, Apple has spent several years moving beyond hardware-based profits by diversifying into a wide range of services such as streaming entertainment, cloud backup, fitness and financial products.