On Tuesday, Apple joined the ranks of companies that enable customers to pay for online purchases in installments by adding a new feature to its digital wallet.
The first installment of a purchase financed with Apple Pay Later is payable at the time of purchase, with the remaining three installments spread out over six weeks. If an Apple user needs a loan of $50 to $1,000 to make an in-app or online purchase, they can ask for one right from the Wallet app.
According to a press release, the company has begun rolling out the payment option to a subset of users in the United States, with plans to give it to all eligible customers over the next several months. Apple initially hinted at the addition last year.
As a result of high inflation and general economic uncertainty, an increasing number of consumers have turned to purchase now, pay later services, such as those offered by Apple. Affirm, Klarna, and Afterpay are three additional well-known services that give the same financing terms.
Some economists and consumer activists, however, are worried that using these services will encourage consumers to take on more debt.
Terri R. Bradford, an expert in payment systems at the Kansas City Federal Reserve, told CNN in the past that the installment process gives the impression that a customer is paying next to nothing for the product or service they are purchasing. It’s possible that if you divide the total cost of your purchase into four equal payments, you’ll end up spending more than you would if you paid cash up front for everything.
Yet Apple insists that this new function was created keeping its customers’ financial well-being in mind.
In a press release issued on Tuesday, Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet, said, “There’s no one-size-fits-all approach when it comes to how people manage their finances.” We’re pleased to offer Apple Pay Later to our customers because we know that many people value financial flexibility.
Loan payments scheduled by Apple users can be monitored and managed in the Wallet program. The business also claims that applying for a loan through the app will have no effect on the user’s credit score.
The Mastercard Installments program facilitates Apple’s “Pay Later” choice.