Apple Pay Later: What is it and how to use

Apple Pay Later is one of the newest features announced at this year’s WWDC — Apple’s developer conference. When we put Apple’s ambition to go deeper into the financial sector aside, it looks like we, ordinary Apple customers, could benefit a lot from Apple Pay Later when it comes out this fall. So, let’s take a look at what we know so far about Apple’s new financial feature and see if it will be as promising as Apple claims.

What is Apple Pay Later?

Apple Pay Later is a new financial service that will enable users to make Apple Pay purchases and split the cost into four equal payments spread over six weeks with zero interest and no fees of any kind. You will be able to find it in the Wallet app on your iPhone. For example, if you want to buy a pair of Jordans from Amazon that cost $455 and don’t want to pay the whole sum at once, you can use Apple Pay Later to order the shoes and pay for them in four installments of $113.75 every two weeks. You will pay the exact sum of $455 without any fees or interest. However, based on the image below, you will most likely be required to make the first installment on the same day you purchase the product.

Also, since Apple Pay Later will be part of Apple Pay, it will probably be safe to use as well. As Cupertino promotes, “Apple Pay is safer than using a physical credit, debit, or prepaid card.” It needs confirmation through Face ID, Touch ID, or passcode for making any transactions. And, every time you make a purchase, it uses a device-specific number and a unique transaction code. Thanks to this method, Apple doesn’t share your identity or credit card numbers with merchants and doesn’t store them on your device or on its servers.

Where will Apple Pay Later be available?

Apple Pay Later will be available only in the US at launch. As for which stores you will be able to use it in, Cupertino said that Apple Pay Later will be available everywhere where Apple Pay is supported.

When will Apple Pay Later be available?

We expect Apple Pay Later to be released with iOS 16 this fall. Cupertino presented Apple Pay Later during the iOS 16 keynote as part of the new set of features coming to the Wallet app.

How will Apple Pay Later work?

If you’ve been dreaming about using Apple Pay Later to purchase the new iPhone 14 Pro Max, you’ll be disappointed to learn that the new Wallet feature will most likely be limited to a maximum of $1,000 per transaction.

Furthermore, the exact maximum credit Apple will allow you may not even be $1,000. The amount you will be able to get will depend on your credit report and score. As Apple stated, “loans are subject to eligibility checks and approvals.”

Cupertino will also use the data on its customers for identity verification and to prevent fraud attempts. So, if you have good financial standing with Apple and other banks and have kept your distance from fraudulent activities, you are more likely to be approved for Apple Pay Later.

Now comes the question: who will lend the money for your Apple Pay purchase? Well, for its Apple Pay Later feature, Cupertino won’t use the services of Goldman Sachs to loan money, as it does with Apple Card. The tech giant will use its own subsidiary called Apple Financing LLC to finance your spending habits. So, basically, you will pay your loan not to a bank but to Apple itself.

As for the technical part, Apple will use Mastercard’s system to connect clients and merchants. When a user buys something through Apple Pay Later, the merchant will receive a 16-digit card number generated by Goldman Sachs, showing that the purchase was made via Apple’s new financial feature.

How to apply for Apple Pay Later?

According to Apple, you will be able to apply for Apple Pay Later when making Apple Pay purchases or directly in the Wallet app. There is no word yet on whether an application procedure will be introduced.

How to buy products with Apple Pay Later?

When you make a purchase with Apple Pay, you will have the option to “Pay In Full” or to “Pay Later.” If you choose the latter, you will apply for the Pay Later program, and if you are eligible, you will continue with your purchase.

Bear in mind that to use Apple Pay Later, you will have to link your debit cards to the service and unless you opt out, the system will automatically collect the payments from your bank account every two weeks.

Also, in the Wallet app, you will be able to see how many installments you have left, and if you find yourself with more cash, you will be able to pay the next amount before the due date.

Apple Pay Later vs Apple Card

Apple Pay Later or Apple Card? Which one is better? Well, the Apple Card is a credit card. Although you don’t pay fees, you pay interest on the borrowed money. When buying a product with an Apple Card, you can choose a long period of time, like 12 or 24 months, to pay off the loan. Also, you receive daily cash back when using your Apple Card.

With Apple Pay Later, you will be able to buy a product and pay the exact price without any interest. However, the amount you will be able to borrow will be capped. Furthermore, you won’t be able to choose the payback period of the loan, and there won’t be any cashback perks when you purchase something with Apple Pay Later.

So, which one to use? Well, it all depends on what you want to purchase. It appears that Cupertino wants you to use Apple Pay Later when you want to make smaller purchases and its Apple Card when you want to buy something expensive.

For example, it would be better to use Apple Pay Later to buy a pair of Jordans or, as Apple demonstrated, an espresso machine. This way, you won’t cough up the whole sum at once , yet you also won’t pay any interest.

However, for any purchases north of $1,000, Apple Pay Later just won’t work. You will either need to turn to the Apple Card or another type of credit service.


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