Apple Pay Users Might Soon Be Able To Pay For Purchases In Installments
In another attempt to make purchasing easier with Apple Pay, the company is reportedly working on a service in which customers can pay for items in installments and without using an Apple Card. The feature would rival other services already in place like Affirm and PayPal. Not to mention, Apple would certainly benefit from the feature, considering how many people have access to Apple Pay.
In its current form, Apple Pay is quite popular. It's an easy way to quickly pay for something using a preferred card. On most iPhones, it is just a matter of double-tapping the power button and the primary card will pop up, allowing the user to tap a nearby card reader for a contactless transaction. This feature also extends to Apple Watch as well, making for a simple and seamless transaction. Then there's Apple Card, a credit card built specifically for the service, allowing users to make Apple Pay purchases with ease. On Apple's webstore, products can also be purchased in installments if customers use Apple's credit card. The main limitation with Apple Pay is that without the Apple Card, users will need to have the money on one of their cards in order to pay for items at retailers.
The whole "buy now, pay later" system is an increasingly popular form of payment, as it allows a customer to purchase an item without actually putting any money down at the time. Over installments, the customer can then pay back what they promised to pay for the item. Currently, those services are often limited to online retailers, but it looks like Apple plans on taking this feature to all of its users by incorporating it into Apple Pay. According to Bloomberg, the system will work by allowing users to select how'd they like to pay after activating Apple Pay. The user can choose either to pay in either four interest-free payments every two weeks or stretched out across several months with interest. The first payment plan is called the "Apple Pay in 4" plan while the other is "Apple Pay Monthly Installments," according to Bloomberg's sources.
Apple hasn't specified what the interest rate for the longer plan will be. According to Bloomberg, Affirm charges 30-percent APR for the service and that seems to be at the higher end among "buy now, pay later" services. While Apple's service won't require a credit check to be run on the user, a government-issued ID is needed to apply for the program. Once approved in the Wallet app, the user will then be able to control and make payments, allowing for an easy one-stop-shop to manage the service. It's also reported that some of the plans offered will exclude late or processing fees by focusing on interest charges instead.
It makes sense that Apple wants to get into the payment plan game. Considering 85-percent of retailers in the U.S. accept Apple Pay, the feature could make payment plans one of the easiest options for customers. As with all payment plans and credit cards, however, users should exercise caution when opting for the service, as interest can stack up if not careful. At present, there is no information on when the service will come to Apple Pay users and, as it is still in development, it could be subject to change.
Source: Bloomberg