Apple’s ‘Pay Later’ Is the Latest Plea for Your Loyalty

Apple introduced a credit card in order to have a hand in how you manage your money.

The credit card was an all-white, heavy metal device that was used for parody. The vice president of Apple Pay said at the time that its compatible software would help people lead a better financial life. You can see all your transactions in Apple's digital wallet, get text messaging support, and see color-coded charts of your purchases. This was the future of finances.

It was no surprise that Apple would jump on the latest payment trend. At its annual software conference this week, Apple said that it would roll out Apple Pay later this year. The service will allow users in the US to pay for things in installments, with no fees or interest, over six weeks. Do you want to pay up front? Is it possible in this economy? It's pointless with all of the options.

Apple is joining a group of companies that allow people to pay for purchases over time. The growth of these services in the past few years is projected to account for 12 percent of all transactions by the year 2025. Unlike credit cards, they offer short loans with no interest or fees. Before issuing a loan, they don't check credit. In many cases, the banks are the ones who give the loans, not the companies.

Consumer advocates and researchers are concerned about buy-now, pay-later services. The Consumer Financial Protection Bureau opened an inquiry into BNPL services late last year, expressing concern about accumulating debt, regulatory arbitrage, and data harvesting in a consumer credit market already changing with technology.

Marshall Lux, a research fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School, has written that consumers who already struggle to pay for things can be helped by BNL. According to an SFGate story, financial experts warn that this trend is particularly dangerous for young consumers.

The consumer sentiment on zero-percent payment plans is mostly positive. Positive consumer sentiment is one of the things Apple is good at. For the past few years, Apple has sat back and watched other merchants reap the benefits, while slowly dipping it's toes into zero-interest plans. Prior to this, Apple customers could finance a new iPhone at a zero percent interest rate if they used an Apple credit card. Apple is entering a fraught category with potentially negative consequences but not without some provisions that differentiate it from other services.