Apple has joined Successful Business “Buy Now, Pay Later” With a personalized service called Apple Pay Later. The service was announced earlier this week at Apple’s Worldwide Developers Conference 2022 and will initially launch in the United States later this year.

Pay Later will be integrated into the Apple Wallet or Wallet app and can be used for any purchases made through Apple Pay. Customers can divide the purchase price into four equal taxes without interest or commissionDistributed over four months.

However, Apple will first conduct a soft credit check for consumers who want to use the service. The tech giant claims it has developed a feature to consider “consumers’ financial health”. Apple is likely to seek to strengthen its position in the world of consumer finance and increase its profitability. And consumers need to be aware of the risks Use this new service.

Apple: User favorite

With the release of Pay Later, Apple will compete with other similar financial technology companies, including PayPal, Block, Klarna, and AfterPay, some of which Saw their stock price fall After the announcement of the new service. Apple has its huge market, brand power and ability to attract millions of people to its products and services.

And by focusing on the user experience, Apple has managed to develop a community of dedicated fans.. There is no doubt that the company is one of the favorite brands of consumers.

Apple also founded An ever-growing ecosystem In which consumers are encouraged to maximize access to Apple products and services, for example by making payments via their iPhone instead of a bank card.

The tech giant offers ways to integrate individual computing capabilities before the phone or wristwatch, while taking into account the consumer experience. Pay Later further enhances the customer-centric experience. This is another way that users can combine all the necessary tools In a unified ecosystem.

What are the benefits to Apple?

Apple can make a financial profit through Pay Later. iPhone-based payment services are received by 85% of US retailers. And a 2021 survey found that about 26% of online shoppers in Australia used, for example, “buy now, pay later”.

As more and more Apple customers start using Pay Later service, the giant will benefit from merchant taxes, payments made by retailers to Apple in exchange for offering Apple Pay to customers. The company as well Gain valuable insights into customer buying behaviorAnd it will allow you to pre-determine your preferences and future expenses.

To join the “Buy Now, Pay Later” service, Apple has joined forces with Goldman Sachs, which will finance the loans. This relationship has existed since 2019. Goldman Sachs acted as Apple Credit Card Partner (though Pay Later is not affiliated with that card). This is a strategic partnership that has helped Apple gain a strong foothold in the world of consumer finance.

Challenges for consumers

The reality is that the world of unregulated finance, which includes buying now, paying later, is not good for all consumers. Young demographics (such as Gen Z and Millennials) and low-income families may be more vulnerable. On the risks associated with using these services and, consequently, on the accumulation of debts.

Purchases with “Buy Now, Pay Later” schemes can be driven by a desire to own the latest gadgets and expensive items, which is facilitated by smart marketing campaigns. Such schemes can accustom consumers to purchases so that they do not feel the pain of parting with cash.

In terms of consumer psychology, These services contribute to immediate satisfaction and involvement of young people in the consumption routine. In other words, they can consistently spend more money on purchases than they actually could. On the other hand, if the customer does not pay the fee in Pay Later it Negatively affect your credit ratingWhich can have unintended consequences when applying for a traditional loan or credit card.

Focusing on consumer behavior can also lead to so-called. “Effect of ownership”. The term refers to the fact that people can attach to their purchases and are less likely to return them, Even if they can not afford it. Technology-based, customer-centric marketing favors Apple over other “buy now, pay later” schemes.

The company ensures that the new service is designed with consumers’ financial health in mind. But As with any of these services, users need to be aware of the risks and deal with them carefully.