Apple has joined the “Buy Now, Pay Later” business with a personal service called Apple PayLetter.
The service was announced earlier this week at Apple’s World Wide Developers Conference 2022 and will be launched in the United States early this year.
Pay Later will be integrated into the Apple Wallet or Wallet app and can be used for any purchase made through Apple Pay.
Consumers will be able to divide the purchase cost into four equal payments, without interest or commission, over four months.
However, Apple will first run a soft credit check on users who want to use the service.
Apple: Consumer favorites
With the launch of PayPal, Apple will compete with other similar financial technology companies, including PayPal, Blockchain, Clara, and AfterPay, some of which have seen their share prices fall since the announcement of the new service. ۔
Apple has a huge market, brand strength, and the ability to attract millions of people to its products and services.
And with its focus on the customer experience, Apple has managed to foster a die-hard fan community. There is no doubt that the company is one of the favorite brands of consumers.
Apple has also set up a growing ecosystem where consumers are encouraged to access as many Apple products and services as possible, for example by paying through their iPhone instead of a bank card.
The tech giant offers ways to integrate pre-existing computing capabilities into the phone or wristwatch, keeping in mind the user experience.
Subsequent payments further enhance this customer-centric experience. This is another way for users to integrate all the tools they need into one ecosystem.
Advantage for Apple
Apple Pay can get financial benefits later.
85% of US retailers accept iPhone-based payment services.
And a 2021 survey found that around 26% of online shoppers in Australia, for example, use “buy now, pay later” services.
As Apple customers are increasingly using the PayPal service, the giant will benefit from merchant fees, payments that retailers make to Apple in exchange for being able to offer Apple Pay.
The company will also gain valuable insights into consumers’ buying behavior, which will enable them to predict their future preferences and expenses.
To offer a “buy now, pay later” service, Apple has joined forces with Goldman Sachs, which will finance the loans.
This relationship has been established since 2019. Goldman Sachs has acted as a partner for Apple’s credit card (although Pay Later is not attached to this card).
It is a strategic partnership that has helped Apple make a strong start in the world of consumer finance.
Challenges for consumers
The fact is that the world of unregulated finance, which involves buying now and paying later, is not good for all consumers.
Younger populations (such as Gen Z and Millennials) and low-income households may be at greater risk for the risks associated with using these services and may accumulate debt as a result.
With the “Buy Now, Pay Later” scheme, purchases can be driven by a desire to own the latest gadgets and luxury items, through smart marketing campaigns.
Such schemes can make consumers accustomed to shopping without feeling the pain of cash separation.
From a consumer psychology perspective, these services promote instant gratification and engage young people in the routine of use.
In other words, they can spend more on groceries than they can afford.
On the other hand, if a Consumer does not pay a visit to Pay Later this will effectively negate its creditworthiness, which will result in the result of the ad hoc solution to the traditional transactions or credit transactions.
The info in the consortium can also disconnect the word “proprietary effect”. The term refers to the fact that people can appreciate their compliments and it is possible that those who are devoured, including those who can not.
The marketing is based on the technology and centered on the consumer from Apple una venta about other compositions of “buy and sell”.
The empire asserted that the new service was designed to hold a salute to the financiers of consumers.
But as is the case with these services, the consumers should be aware of the rises and maneuvers with the cue.