Fashion brand

Why Apple says it’s time to pay later

For Apple, Pay Later will pay for Apple Pay.

That’s hope, anyway.

It’s no secret that explosive consumer demand for buy now, pay later (BNPL) has sparked an explosion in the number of companies offering this option.

Now Apple, among tech giants struggling to cement its own e-commerce ecosystem, joins the BNPL crowd.

As widely reported on Monday, June 6, the company announced in a statement that it would be launching Apple Pay Later.

And in the ad of the installment payment option, the company said users in the United States will be able to split the cost of an Apple Pay transaction into four installments over six weeks, with no interest or additional fees.

In terms of mechanics, payments are made, tracked, and refunded through the digital wallet, and are available for online or in-app purchases, through the Mastercard network.

Cross pollination

At first glance, Apple Pay could indeed get a boost. Late in the third quarter of last year, PYMNTS’ own data showed that around 94% of consumers with Apple Pay enabled on their iPhone weren’t using it in-store to pay for purchases. Seven years later, this statistic could be considered disappointing. This is a more or less stable rate compared to the two previous years.

And yet, the dry kindling is there. Other PYMNTS data shows that 70% of merchants accept Apple Pay.

Read also: Apple Pay Adoption Statistics

And in slightly more granular detail about what could drive greater Apple Pay adoption, there’s also the launch of Apple Pay Order Tracking, which will allow merchants to provide receipts and order tracking capability. , integrated via Shopify, into the wallet.

As for the installment loans themselves, Apple has its banking partner in Goldman Sachs, and Apple isn’t shy about its “Breakout” ambition to become, at least in part, a financial services company.

Also see: The Big Thing Apple’s Project Needed But Didn’t

Reflecting earlier this year on what Apple’s BNPL could become, Karen Webster wrote that “announcing Apple’s installment program could be a first step” towards establishing a customer connection. complete, “maybe even a V.1 for the introduction of Apple’s version of Amazon Prime.”

The introduction of a bundle of hardware and software services provided by Apple for a fixed monthly fee creates a different relationship between Apple and its customers. BNPL then becomes a conduit for more than just cash flow visibility – and certainly more than just catching up with the Affirms of the world.

The integration of installment payment options would apparently fuel consumer purchases of hardware, apps, and all sorts of other transactions. The interest is there and now is the time to strike while the iron is hot – especially since inflation is making us all a little leery of traditional credit.

PYMNTS found that among department store shoppers surveyed, for example, 46% said they were very interested in using BNPL online, while 41% were interested in using BNPL in-store. BNPL’s appeal is greatest among millennials, 70% of whom said they would use the option – and it’s all squarely in Apple’s sights.

Read here: PYMNTS Intelligence: How BNPL is shaping consumer buying behavior

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NEW PYMNTS DATA: THE CUSTOM PURCHASING EXPERIENCE STUDY – MAY 2022

About: PYMNTS’ survey of 2,094 consumers for The Tailored Shopping Experience report, a collaboration with Elastic Path, shows where merchants are succeeding and where they need to up their game to deliver a personalized shopping experience.