Tech giant, Apple Inc, recently introduced its ‘buy now, pay later’, service in the United States, potentially shaking up the fintech industry. This move is likely to disrupt the market and create new competition among top players such as Affirm Holdings and Klarna, a Swedish payment firm.
What it Offers?
Apple Pay Later is a new service in the U.S that offers customers the ability to divide their payments into 4 installments over a six-week period, without any additional fees or interest. Initially, the service will be accessible to a limited number of users, but a complete launch is planned in the upcoming months.
How Does it Work?
The company mentioned that users have the option to access loans ranging from $50 to $1,000 for purchases made on iPhones and iPads using Apple Pay, provided that the merchants accept this payment method. Before users can use the service, Apple will carry out a credit check to ensure the user is eligible.
Advantages for Apple against others
Apple Pay Later has several advantages for customers compared to other company services. Consumers may choose Apple Pay Later for the first time due to their trust in Apple’s reputable brand. The service does not impose interest or fees if the shopper pays on time. Furthermore, Apple Pay has a major user base, it is accepted by most physical retail locations in the U.S. Moreover, nearly all smartphones are Apple devices in the U.S, potentially making it a major player in the BNPL industry.
Apple can benefit from the merchant fees paid by retailers who offer their customers the Pay Later service. Furthermore, the company will gain additional access to valuable information on consumers’ buying habits, enabling the company to forecast their future consumption and expenditure patterns.
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