Everyone knows that Apple is a staple when it comes to brand identity out there. In fact, almost everyone wants an Apple product whether it being their iPhones, iPads or even the Macbook's.
But we all know one thing, to buy an Apple product, it could cost you an arm and a kidney. OK not really but it’s really expensive and we undoubtedly know that.
Apple is now getting their hands into a financial service sector which allows customers to buy now and pay later (BNPL) scheme which is called Pay Later as an extension of Apple Pay (which is only available in the US for now).
The new feature will be rolling out with the upcoming iOS 16 this fall which will enable customers to make big purchases with instalments.
Read: Apple Announces iOS 16 And Here’s What You Can Look Forward To!
BNPL will allow users to split any purchases into four equal payments over the span of six weeks. The only condition is that customers are required to pay a quarter of the full amount upfront while the rest of the payments is made done every two weeks. For those who have Apple pay, the amount will be deducted out of the Wallet app either online or in-app using the Mastercard network.
The best part of it is that those taking the instalment plans from Apple will have a zero-interest rate. This makes the deal more attractive to those who can’t pay the one lump sum.
The more unforgiving end of this instalment plan is that it’s the risk of the youth or younger audience who’s at least 73% of their customers to miss payments (cause you know some of them don’t manage their money properly). It was reported that at least 43% of the Gen Z consumers are likely to miss one payment which leads them to an overdraft fee.
As of now the exact mechanism for the BNPL loans has not been announced but Apple says they would decision will be made by their treasury department. As for some of Apple’s financial ventures is still handled by Goldman Sachs who oversees the Apple Card credit card, a new subsidiary called Apple Financing LLC will later be handling Apple Pay.
Will banks be involved when needing to approve of credit loans?
According to Apple, through this new subsidiary, they will be handling all the decisions and loans without a partner bank for its BNPL feature. As Apple Financing does not have a bank charter, Goldman Sachs and Mastercard will still be involved in the Pay Later scheme as they are qualified to issue the payment credentials.
Now the real question is if this scheme will be coming in Malaysia as Apple Pay is not available yet.
So, let us know your thoughts, would you rather be saving up for a one lump sum payment or do you prefer having to pay in instalments?
*Sources: Visual and Reference Credits to Social Media, Reuters, Apple & various cross references for context.
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