In Apple Pay Later it is Apple itself who advances the money for your purchases

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One of the most leaked new features Apple announced as part of iOS 16 was Apple Pay Later, its “buy now, pay later” service integrated into Apple Pay and Wallet. In this way it ends up becoming a fintech after other previous steps such as the launch of Apple Pay in 2014 and the Apple Card in 2019.

One of the unknowns that remained to be resolved after the presentation was what role would Apple have exactly in the financing. Because this service was advertised as fully integrated into any Wallet with an Apple Pay compatible card anywhere in the world. And that was strange: normally, innovations in a sector as regulated as the financial sector require slow deployment, country by country, and with a partner as was Goldman Sachs in the case of the Apple Card, which has not yet left the United States.

Apple advances the money, MasterCard as a partner

In that sense, Apple Pay Later allows you to divide any purchase into four installments. No interest. If it was already necessary to understand how Apple was going to advance the money for that payment, it was even less clear to know what happened in the event that a user in a hurry needed to extend the return period. Normally, at that point is when the usual services begin to charge interest, and there is their business model. Do not earn anything with customers who pay on time, and monetize those who require extra terms.

Thanks to CNBC, we already have the details: Apple has partnered with MasterCard, who interacts with vendors and offers a white-label buy-now-pay-later product called Installments. That’s what Apple Pay Later uses, and that’s why it can be global: because it comes from a global partner like MasterCard.

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Also, it is Apple itself that puts the loan money thanks to a subsidiary created specifically for this purpose, ‘Apple Financing LLC’, and thanks to the hundreds of billions of dollars in cash that it has available for its spectacular financial results in recent years.

Apple is using the hundreds of billions of dollars it has managed to amass in cash in recent years to join the instant credit business.

In the article of CNBC It is also mentioned that Apple “probably” limits these credits to about 1,000 dollars, usual limits in this type of immediate credit where there is no credit test as there is in personal loans of larger amounts. Namely: we will not be able to use Apple Pay Later to split for any amount. And if at any time we cannot return a credit, we will no longer have access to this option, which is expected.

As a final result for the customer, the four installments in which purchases can be divided into a first installment paid at the time of purchase, a second installment two weeks later, a third installment two weeks later, and a final installment installment paid after another two weeks. Total, four installments spread over six weeks.

Whether or not these advances are the prelude to becoming a banking entity as such tomorrow is something that only the passage of time will tell, although there is an abyss between a technology company with sufficient financial muscle to grant microcredits to users of its products of hardware and a banking entity as such, above all because of the level of regulation that it requires. Although one of the few companies in the world with the power to do so without difficulty is precisely Apple.

One of the most leaked new features Apple announced as part of iOS 16 was Apple Pay Later, its “buy…

One of the most leaked new features Apple announced as part of iOS 16 was Apple Pay Later, its “buy…

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