Apple Will Provide Out-of-Pocket Credits for Its New Service

While the financial initiatives of technology giants continue rapidly, on June 6, Apple introduced a huge feature for the Pay service, which has not yet been put into service in Turkey. The company gives Apple Pay users a ‘buy now pay later‘ announced that it will begin to provide services. However, at the event, the company did not share the details of how it will provide this service.

Today, these questions have been answered by Bloomberg. Reaching Apple, Bloomberg received an answer about what Apple would do to provide the service to users. In essence, Apple able to give loans to customerswill also act as a finance company that can perform risk management and credit assessments of its customers.

Apple will pay its customers directly

Moreover, according to the shared details, Apple, like the credit card service Apple Card, will not be affiliated with a different financial company. Working with the Goldman Sachs Group to evaluate the credit card, Apple will offer the buy now pay later service under the umbrella of ‘Apple Financing LLC’ under its sole responsibility. In other words, the company will give its customers money from its own safe.

Apple Pay Later, a pay-now-now service that Apple overtakes all technology companies, allows customers to make any Apple Pay payments. the possibility of splitting in four interest-free installments in a six-week period will present. In this short-term service, the company will not cooperate with any bank. But, according to Bloomberg, Apple is working on a service that will start to include monthly installments. This service will likely require collaboration with a different bank.

So how will Apple make money from this service without interest?

Actually, the answer to this question is quite simple. Users will have the opportunity to divide their payments in four installments instead of making them in one go. they will be able to shop in higher volumes. A study by SFGate on pay-it-now services showed that customers who previously spent $100 in one go increased their spending with the service to as much as $365. In other words, customers’ spending has increased almost 3 times. It was also emphasized that this increase was experienced especially in the Z generation.

On the other hand, another survey by Morning Consult shows the opposite of this system. can harm companies showed. The value of Klarna, which benefited from this service, decreased from $ 46 billion to $ 30 billion as a result of customers’ delays in their payments.

In addition to all these, services such as Affirm, Klarna, Zip, Afterpay and PayPal, which offer buy now pay later services, have begun to enter the radar of the authorities. Recently, the US Consumer Financial Protection Bureau accused these companies of ‘debt accumulation, regulatory arbitrage and data collection in the consumer loan market already rapidly changing with technology’. brought under scrutiny. Likewise, the UK has introduced stricter regulations for buy now pay later companies.