Apple has announced its acceptance of the Buy-Now-Pay-Later (BNPL) scheme for its devices, allowing users to get its products and pay in instalments within six weeks – with zero interest and no fees.

The BNPL service will allow Apple users to easily track, manage, and repay their Apple Pay Later loans using their Apple Wallets. They are also open to loans of $50 to $1,000, which can be used for online and in-app purchases made on iPhone and iPad with merchants that accept Apple Pay.

Statista data shows that buy-now-pay-later BNPL service provider Klarna accounted for approximately 90 million active users, as of June 2021, while competitors such as Afterpay and Affirm recorded 16 million and 7 million active users, in the same period.

Apple's BNPL service is currently available to select users in the United States, with plans to offer it to eligible users in the coming months. This article provides an overview of the BNPL service and how users can access the service.

Opening an Apple Wallet account

The first step is to open an Apple Wallet account. This Wallet has no impact on their credit and users will be expected to enter the amount they would like to borrow and agree to the Apple Pay Later terms.

For instance, a user with an opened wallet can apply for a loan of $500 today using the Wallet and schedule payment for May 1st. This way, he has ample time to pay the requested loans. Also, a soft credit pull will be done during the application process to ensure that the user is in a good financial position before taking up the loan.

Getting approval

Upon the opening of the Wallet, approval is the next step towards getting access. After a user is approved, they will see the Pay Later option when they select Apple Pay at checkout online and in apps on iPhone and iPad, and can use Apple Pay Later to make a purchase. Once Apple Pay Later is set up, users can also apply for a loan directly in the checkout flow when making a purchase.

Apple Pay Later is built right into Wallet, so users can seamlessly view, track, and manage all of their loans in one place. With Apple Pay Later in Wallet, users can easily see the total amount due for all of their existing loans, as well as the total amount due in the next 30 days.

Users can also choose to see all upcoming payments on a calendar view in Wallet to help them track and plan their payments. Before payment is due, users will also receive notifications via Wallet and email so they can plan accordingly. Users will be asked to link a debit card from Wallet as their loan repayment method; to help prevent users from taking on more debt to pay back loans, credit cards will not be accepted.

Using Mastercard

Apple Pay Later is enabled through the Mastercard Installments program, so merchants that accept Apple Pay do not need to do anything to implement Apple Pay Later for their customers.

When a merchant accepts Apple Pay, Apple Pay Later will be an option for their customers during checkout online and in apps on iPhones and iPad. Goldman Sachs is the issuer of the Mastercard payment credential used to complete Apple Pay Later purchases.