NEW: Apple Pay Later - The end for Affirm, Afterpay, Klarna, other Buy Now Pay Later players? (2023)

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Video

David Roscoe from problemoney.com there's, a new thousand pound gorilla in the buy now pay later space.

And that is apple with Apple pay later could they kill off things like a firm after pay clarna and all the rest could they even kill off credit cards? Well, that's not gonna happen.

But let's take a look at what they are up to Apple, has sort of a reputation as an innovator I shouldn't say, they sort of they do have a reputation as an innovator, but oftentimes Apple will also sort of sit back and see how things are working elsewhere, see what succeeds and what doesn't and then jump into a market and use their huge Market power to essentially become a player in a place that they know they can have some success and that's kind of what it looks like here with Apple pay later getting into the buy now pay later Market to steal some market share from these others, maybe to increase their profits, but maybe even more so to sort of defend their Turf with Apple pay.

So let's talk about how Apple pay later works as I make this video they're, rolling it out to a smaller subset of Apple pay users, but soon it will be available to everyone.

What you are doing with Apple.

Pay later is you are taking out a small, Short, Term Loan that you are going to pay back.

And there are no fees and no interest.

This is going to be on Apple pay purchases.

You will pay 25 at the time of purchase 25 of that purchase price.

Two weeks later, the next 25 percent two weeks after that, the last 25 percent two weeks after that, which means four installments over a six week period, again, no fees, no interest.

You are going to have this ability, not just on Apple products.

I want to make that clear here.

This is for anything that you purchase with Apple pay online.

And through retail apps, it looks like so far.

You cannot do it on anything where you are making an Apple pay purchase in person so it's going to be online or through an app so it's, not just Apple products.

This is going to compete with things like a firm and after pay and Clara that kind of thing where you can use it anywhere that Apple pay is accepted.

Now specifically, when you first sign up for Apple, pay later, what's going to happen is you are going to be asking them for a loan anywhere from fifty dollars to one thousand dollars and you're, not going to be asking for a specific purchase that you want that loan against at least at the beginning.

So you're going to ask for a certain amount they are going to look you over to a soft poll on your credit, and they are going to approve you for either the amount you want, or maybe they would approve you for something less than that.

There obviously is the possibility.

They would not approve you at all.

But anyway, you would then be approved for a certain amount.

And then you would have 30 days to make a purchase with that amount when you buy something using Apple pay at a merchant that is just for the first time after the first time once you are in the Apple pay later program.

What would happen is when you are making purchases and using Apple pay, you would be able to ask for a new loan right on the spot as you are making the purchase.

But like a lot of these Services what's going to happen is once you are in, you are going to be on the Retailer's website and Apple pay is going to be one of your choices to make that purchase.

And then you'll have the Apple pay later option as an option with Apple pay like I said, when you apply for Apple pay later, it is going to be a soft pull on your credit, which means it is not going to impact your credit score one way or the other.

So whether you're approved or denied you're, not going to have to worry about anything there.

Now once you actually use Apple pay later for a certain loan to pay something off over that six week period Well that starting in the fall, apple says will be something that they will start to report to the major credit bureaus.

And assuming you are making all your payments on time.

And as you have agreed to well, then that could make your credit score.

Go up.

Of course, it could make it go down as well.

If you're not making your payments when you should Apple pay later in terms of repaying, your Apple, pay later loans, you will have to link a debit card to your Apple wallet.

You cannot link a credit card.

So that debit card is going to be the source of your repayment.

You will then be able to see your loans within the Apple wallet.

If you have more than one loan, they will show your multiple loans.

They will show payments that you have coming up in the short term show you how many payments, uh, you're going to have over the next month or so apple is good about laying all those things out nicely.

So you can kind of visualize what's going on in case, you are wondering, Apple has what I think is a new financing arm called Apple financing LLC.

And that is who is actually going to be giving out the loans and doing the credit assessment now for the Apple credit card, they are partnered with Goldman Sachs and everything gets pushed over to Goldman Sachs to make those decisions.

But in this case, apple is making the decisions Goldman Sachs is slightly involved in the fact that dealing with the merchants and Apple pay and MasterCard Goldman Sachs somehow needs to be in there and MasterCard needs to be in there to make it all work.

But apple is the one that is going to be making the decisions and loaning that money.

So from Apple's perspective, this is really more about protecting their Turf than it is about really making a big change to their profitability.

Apple makes money on Apple pay getting a little slice of every transaction when you run it through Apple pay.

So when they have companies like a firm after pay clarna and the others out there that are trying to get you to use a different method to finance, some of your purchases.

Well that takes you away from Apple pay and so Apple by offering Apple pay later.

They can bring you back in.

And then they can also sort of make the calculation that you probably don't have a whole lot of brand loyalty to a firm or after pay or clarna.

You just use them if they were convenient.

But if you already are using your iPhone to make purchases with Apple pay, and you can get Apple pay later and essentially do the exact same thing that you could with any of these other services.

Well, then why wouldn't you just stay with Apple.

So Apple wants to keep you in Apple pay in their system where they make their money there more than they're, trying to make money off of the buy now pay later loans, the concept of buy now pay later has become more popular over the past few years.

But in truth, it's, not a whole lot different than a credit card you're, still buying something that you're going to have to pay off over a certain period of time or they're going to be some consequences hit to your credit score.

If you don't pay it off in time, potentially extra fees if you're not making all your installment loan payments on time.

Apple is not actually said with Apple, pay later what those consequences all are if you don't pay off their loans.

But a lot of people like buying out pay later because it feels like you are getting something where you can't fall into debt, because you have to make these payments, but you still could get yourself in trouble with by now pay later just like credit cards and with a credit card, you get a grace period where you wouldn't have to pay a piece up front.

You would have a nice 25 30 days or so to pay off that purchase in full.

And you would not have to pay any interest as long as you don't revolve from one one month to the next and with a credit card, you can potentially earn some rewards.

So there are upsides to using credit cards that would be my preference versus buy now pay later, but for some people that makes them feel more comfortable.

And then obviously if you're someone that is having trouble getting approved for credit cards, that's a way for you to finance that maybe you don't have any other options.

Anyway, nothing Earth shattering here with Apple pay later, except for the fact that it's apple.

And when Apple jumps into a market, everybody else should be a little afraid.

And in this case, very afraid, because of the fact that not only does Apple have such an ingrained base with the iPhone, but also with Apple pay and many people if they are already in the Apple ecosystem, they'll be more than happy to use Apple's answer to the buy now pay later solution than a lot of these others, because they don't have a whole lot of loyalty to any of them, but they do have some loyalty to Apple.

So they're probably going to be pretty successful here with this I would love to hear your thoughts about it in the comments section below do you use any of these kind of services would you be more likely to use? Uh, Apple, pay later versus a firm after pay, all of those kind of things, whatever you want to put in those comments, I would appreciate it otherwise I.

Thank you for watching.

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