About Apple Pay Later

Apple announced a new Apple Pay Later feature at this year’s WDCC, and it will be introduced in iOS 16. Essentially, it lets a purchase be split automatically into four payments, with one payment due every two weeks. As long as you pay on time, there is no interest. However, the purchase must be made through Apple Pay.

How It Works

  • When you make a purchase, an installment payment prompt will automatically appear.
  • It then creates four bills, each due every two weeks.
  • You can also pay early if you want.

As for why Apple chose a two-week installment schedule, it may be tied to how people in the U.S. are often paid every two weeks.

My Take

Overall, this feature is not exactly a new idea. It is broadly similar to PayPal’s Pay in 4. But because Apple already has a strong advantage through its hardware ecosystem, it will probably be much easier for the company to promote it. There is still no information on what interest rate would apply after a missed payment, but I’d guess it could be similar to a regular credit card interest rate, with an APY around 10%-20%. In any case, Apple has clearly been expanding further into financial services: Apple Pay, Apple Card, and now Apple Pay Later. After all, making money from financial products is a lot easier than building hardware...

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Hopefully this feature will come with some extra rewards, so there is something new for deal hunters to take advantage of. In the past, Apple Pay and Discover offered 10% cashback, and people went all in on that deal (I bought an iPhone too). Apple Card itself has not really offered many easy opportunities, and Apple P2P send money seems like it might be usable for liquidating Visa gift cards.