Apple wants you to buy things without paying for them right away

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Apple is developing a new service that allows consumers to pay for any Apple Pay purchase in installments over time, competing with the buy now, pay later offers that are famous for services from PayPal. The upcoming service, known internally as Apple Pay Later, uses Goldman Sachs as the lender for the loans needed for the installment offerings.

Goldman Sachs has been Apple's partner in the Apple Card credit card since 2019. But the new offer is not tied to the Apple Card and does not require its use. The buy now, pay later system could help drive Apple Pay adoption and convince more users to use their iPhone to pay for items instead of standard credit cards.

Apple receives a percentage of transactions made using Apple Pay, driving the company's revenue of more than $50 billion annually in services. The service is currently planned to work as follows: When a user makes a purchase with Apple Pay on an Apple device, they have the option to pay for it either in four interest-free payments made every two weeks or over several months with interest.

New Apple service is still under development

The four-payment plan internally is called Apple Pay in 4, while the long-term payment plans are called Apple Pay monthly installments. And when making purchases with the Apple Pay Later plan, users can choose any credit card to make their payments over time. The service is planned to be available for purchases made in retail stores or online.

Apple offers monthly installments via Apple Card to purchase its own products. But this service extends this technology to any Apple Pay transaction. It is not known at the moment the interest rates that Apple plans to collect in monthly installments. The four interest-free installment plans rival similar systems such as PayPal's popular Pay in 4 services.

Users who want to use Apple Pay Later need to be approved via a request sent via the iPhone's Wallet app, where they can also manage payments. Users also need to provide a copy of their local ID to apply for the program. Apple also provides customers with the ability to opt-out of payment plans to pay off the remainder of the purchase balance.

Some Apple Pay Later plans exclude late fees and processing fees, costing users interest only on long-term plans. The Service will also not require a user's credit check. Separately, the company is also testing a feature that allows users to create temporary digital credit cards from Apple Pay Later for individual purchases.