Apple (NASDAQ: AAPL) is entering the “buy now, pay later” BNPL business with its new payments service that is built into Apple Pay and Apple Wallet. However, at the same time, BNPL continues to garner increased scrutiny by government regulators who assert the practice can be potentially harmful to consumers. Apple’s Pay Later service, which has been in development since last year, allows consumers to make an Apple Pay purchase and pay for it in four equal installments over a period of six weeks. These payments bear no interest, but it’s unclear whether Apple will levy a late fee, and if so, how much it will cost. BNPL services, like other payment systems, can result in overdraft fees if they’re charged to an account with insufficient funds, and Apple’s fine print makes it clear that its BNPL offering will be no different. Apple’s Pay Later is likely to face scrutiny since it enters an uncertain market at a time when inflation is rising and customers are struggling to pay for basic necessities.
The Ugly Economics Behind Apple’s New Pay Later System
