Apple unveils buy now, pay later option

Apple Pay Later allows consumers to split the cost of purchases into 4 interest-free payments

Apple announced its new buy now, pay later option available through Apple Pay.  (iStock)

At its WWDC22 keynote on Monday, Apple unveiled a new option for Apple Wallet — Apply Pay Later, a buy now, pay later (BNPL) option for iPhone users.

Apple Pay Later will allow users to split the cost of their purchases into four, interest-free payments anywhere Apply Pay is accepted. The new BNPL option will be available in the wallet app when Apple releases iOS 16 in September. 

BNPL providers partner with retailers to allow shoppers to pay for purchases through an installment plan. These interest-free payments are typically due within a few weeks after the time of purchase.

"Apple Pay Later provides users in the US with a seamless and secure way to split the cost of an Apple Pay purchase into four equal payments spread over six weeks, with zero interest and no fees of any kind," Apple said in a statement. "Built into Apple Wallet and designed with users’ financial health in mind, Apple Pay Later makes it easy to view, track, and repay Apple Pay Later payments within Wallet. 

"Users can apply for Apple Pay Later when they are checking out with Apple Pay, or in Wallet," the company continued. "Apple Pay Later is available everywhere Apple Pay is accepted online or in-app, using the Mastercard network. Additionally, with Apple Pay Order Tracking, users can receive detailed receipts and order tracking information in Wallet for Apple Pay purchases with participating merchants."

If you need help funding a large purchase, a personal loan could be a good option for you. You can visit Credible to find your personalized interest rate without affecting your credit score.


Apple Wallet to allow consumers to track payments, purchase details

In Apple's announcement about its BNPL option, it stressed the ease with which Apple Pay Now can be used without any third-party assistance. It will also allow users to track upcoming payments in their installment plans.  

"You can now get that espresso machine you've wanted and pay for it over time with no additional cost," Apple said during its keynote. "For developers and merchants, Apple Pay Later requires no integration. It just works using their standard Apple Pay implementation."

Apple Wallet will also track details of the purchase after it's made. 

"After you've placed your order, we have another brand new feature that helps them track it," the company said. "Apple Pay order tracking enables merchants to deliver detailed receipt and tracking information directly to Wallet, making it easy to get the latest information on all of your Apple Pay orders delivered securely and privately to your device. Apple Pay order tracking will be offered at millions of merchants through eCommerce platforms starting with Shopify."

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Apple has significant advantage in ‘saturated’ BNPL market, expert says

The BNPL sector is full of providers including Afterpay, Klarna, PayPal and others. But one expert said Apple will have a significant advantage in the "saturated" market: the Apple Wallet app. 

"Though Apple is entering a saturated sector which is gradually attracting the attention from regulators, Apple already has loyal customers so it will be able to directly promote its service to consumers who are already used to using its products and Apple Pay," GlobalData Payments Analyst Chris Dinga said. "According to GlobalData’s Ecommerce Analytics, Apple Pay was the leading digital wallet in the US for eCommerce transactions, putting it ahead of Google Pay, Samsung Pay and even Klarna.

"By integrating Apple Pay Later into the Apple Wallet, it will make it easy for U.S. consumers to adopt Apple Pay Later," Dinga continued. "Making it a payment option available at checkout when using Apple Pay will also give it an advantage over other BNPL providers, as competitors are not likely to be integrated within the Apple Pay system."

Dinga also pointed out that Apple has more cash reserves than its competitors, allowing it to finance its project longer.

"Additionally, unlike its BNPL competitors such as Klarna and Affirm, Apple has enough cash reserves to finance the project over time whereas its competitors are raising questions about their ability to turn a profit once regulations are introduced," he said. "Companies like Apple and PayPal have enough cash reserve that they could adjust their BNPL revenue model and make it profitable if they need to due to new regulations."

GlobalData projects that with Apple's entrance, the BNPL market’s value will rise to $576 billion by 2026.

If you are interested in paying down existing BNPL debt, you may want to consider using a personal loan. To see if this is the right option for you, contact Credible to speak to a loan expert and get all of your questions answered.

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