Apple on Monday announced a new service, Apple Pay Later, that will allow iOS users to pay in installments via an option in the Wallet app. Well, after a Bloomberg report, Apple will handle lending alone without a partner bank.
More specifically, the company will use its subsidiary Apple Financing LLC for the credit reviews and credit decisions for the new service, since this subsidiary has all the necessary licenses to operate some banking services. Until now, all financial services offered by Apple, such as Apple Card and Apple Cash, have been supported by third-party banks such as Goldman Sachs.
For Apple, this is a big step in reducing its reliance on other partners for its own services. earlier this year, Bloomberg previously reported on Apple’s “Breakout” project, which aims to bring all payment processing and financial infrastructure in-house.
Of course, as the report notes, since Apple doesn’t have a banking charter, Apple’s partners like Goldman Sachs and Mastercard will still retain a “small role” in the new Apple Pay Later program.
In 2019, Apple began offering interest-free mortgage payments for Apple Card holders who buy a new iPhone. The offer later expanded to other products, but is still limited to the Apple Store and Apple Card. With Apple Pay Later, any Apple Pay user in the US can pay in installments at any store.
The company has also reportedly developed its own system for fraud analysis, bonuses and interest calculations. With about $200 billion in cash and tremendous earnings each quarter, Apple is certainly one of the few companies in the world with the resources to offer its own financial services.
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