Apple Using In-House Lending for New Apple Pay Later Feature

The new Apple Pay later feature will allow customers to split Apple Pay purchases into multiple payments.

Apple Pay users can choose to spread their payments out over six weeks instead of paying in full. The Apple Pay Later feature doesn't include interest or fees if customers make four payments in a row.

According to the report, Apple will take on the lending for the Apple Pay Later feature, even though it has partnerships with other companies. Apple Financing is a subsidiary that handles credit checks and makes decisions on loans for the service.

This is the first time that Apple has dealt with financing of its own. As Apple Financing doesn't have a bank charter, Goldman is still involved in the program as it issues the Mastercard payment credentials used to complete Apple Pay Later purchases.

In March, it was reported that Apple was working on a plan to bring its financial services in-house. Apple is working on payment processing technology and infrastructure that includes lending risk assessment, fraud analysis, credit checks, and dispute handling, as well as tools for calculating interest, rewards, approving transactions, and reporting data to credit bureaus. Apple may use Apple Financial to handle future services like the hardware subscription service that is in the works, as well as the Apple Pay Later feature.

Apple Pay Later is similar to the Buy Now, Pay Later feature that allows for payments to be made in installments. Apple Pay is only available in the US.