Apple on Monday announced the new “Apple Pay Later” service, which will let iOS users pay in installments through an option in the Wallet app. Now, according to a Bloomberg report, Apple will handle the lending on its own without a partner bank.
More specifically, the company will use its subsidiary Apple Financing LLC for the credit checks and loan decisions for the new service, as this subsidiary has all the necessary licenses to operate some banking services. Until now, all financial services provided by Apple, like Apple Card and Apple Cash, were supported by third-party banks such as Goldman Sachs.
For Apple, this is a big step toward cutting its reliance on other partners for its own services. Earlier this year, Bloomberg had already reported on Apple’s “Breakout” project, which aims to bring all payment processing and financial infrastructure in-house.
Of course, as noted by the report, Apple’s partners like Goldman Sachs and Mastercard will still keep a “small role” in the new Apple Pay Later program since Apple doesn’t have a bank charter.
In 2019, Apple began offering interest-free installment payments for Apple Card owners buying a new iPhone. The offer was later expanded to other products but still is limited to the Apple Store and Apple Card. With Apple Pay Later, every Apple Pay user in the United States will be able to pay in installments at any store.
The company has also reportedly been developing its own system for fraud analysis, rewards, and interest calculation. With about $200 billion in cash and huge profits every quarter, Apple is certainly one of the few companies in the world with enough resources to provide its own financial services.
More about Apple Pay
- Apple Pay Later: How Apple will make money from 0% interest; caution advised
- New ‘Apple Account Card’ now available in the Wallet app for iOS 15.5 users
- Apple Pay upgrading fraud prevention features based on device, location, and more
