Apple, Goldman Sachs working on Apple Pay 'buy now, pay later' service

AppleInsider

Apple is allegedly working with Goldman Sachs to provide enhanced installment payment plans to its customers without using Apple Card, in a service internally known as "Apple Pay Later."

Apple currently provides customers with various ways to pay for goods in installments, including through Apple Card. However, the iPhone maker is apparently planning to offer a similar installment plan service for normal Apple Pay transactions.

Thought to be called "Apple Pay Later," Bloomberg reports the service will employ Goldman Sachs as a lender, but without requiring the customer to have an Apple Card. Instead, it will offer installment payment plans for typical Apple Pay transactions.

It is claimed customers making an Apple Pay purchase will have the option to break down the cost to four interest-free payments made every two weeks, or across multiple months with interest. The four-payment option is apparently called "Apple Pay in 4," while the latter is called "Apple Pay Monthly Installments."

When a purchase is made through one of the two plans, consumers will be able to choose which of their payment cards will be used for their payments. It would also potentially apply to practically any Apple Pay transaction, as it wouldn't be limited to just Apple products.

Some versions of the plan will exclude late fees and processing fees, with interest being the only real cost for some of the longer plans. It also apparently won't require a credit check to be run against the user, and will offer the opportunity for users to pay off the remaining balance early.

The move could put Apple up against other interest-free installment plan services, including PayPal's "buy now, pay later" service and offerings from Klarna and Sezzle.

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byronl

Exclusive to the US, of course

crowley

At this rate it won't be long until Apple have more financial products than they have computer products.

chadbag

Tying it in with Apple Pay opens it up to potential anti-trust problems as the competitors don’t have access to the low level Apple Pay features to offer a competing product.   

(Not commenting yea or nay on this — just pointing out the potential legal issues that may, wrongly or rightly , come from this)

Japhey

chadbag said:

Tying it in with Apple Pay opens it up to potential anti-trust problems as the competitors don’t have access to the low level Apple Pay features to offer a competing product.   

(Not commenting yea or nay on this — just pointing out the potential legal issues that may, wrongly or rightly , come from this)

Not every new thing is a reason to sound the antitrust klaxons. 

In my opinion, it was only a matter of time until Apple offered this, as PayPal, Amazon, and many others already have similar options. 

mknelson

Japhey said:

Not every new thing is a reason to sound the antitrust klaxons. 

In my opinion, it was only a matter of time until Apple offered this, as PayPal, Amazon, and many others already have similar options. 

Maybe not antirust, but it could be seen as anti-competitive if (like so many other programs) it's used to drive traffic to their own retail and away from retail partners.

chadbag

Japhey said:

chadbag said:

Tying it in with Apple Pay opens it up to potential anti-trust problems as the competitors don’t have access to the low level Apple Pay features to offer a competing product.   

(Not commenting yea or nay on this — just pointing out the potential legal issues that may, wrongly or rightly , come from this)

Not every new thing is a reason to sound the antitrust klaxons. 

In my opinion, it was only a matter of time until Apple offered this, as PayPal, Amazon, and many others already have similar options. 

You missed my point.  The reason this may open up Apple to anti-competive claims and maybe anti-trust from that is because it would be tied to Apple Pay and ONLY Apple is allowed access to the NFC for a system wide payments system (yes I know it is possible for apps to access NFC -- this is not  app based but is integral to the system).  Because Apple doesn't allow other companies access to the Apple Pay base infrastructure Apple could be claimed they could be charged with tying one service to another with advantages that competitors don't have.  

ETA:  no, amazon, PayPal, and others do not already have this.  This is a system level feature the others do not have access to. 

I am not expressing my own opinion on this -- just evaluating according to how things often are prosecuted today by authorities 

Japhey

chadbag said:

Japhey said:

chadbag said:

Tying it in with Apple Pay opens it up to potential anti-trust problems as the competitors don’t have access to the low level Apple Pay features to offer a competing product.   

(Not commenting yea or nay on this — just pointing out the potential legal issues that may, wrongly or rightly , come from this)

Not every new thing is a reason to sound the antitrust klaxons. 

In my opinion, it was only a matter of time until Apple offered this, as PayPal, Amazon, and many others already have similar options. 

You missed my point.  The reason this may open up Apple to anti-competive claims and maybe anti-trust from that is because it would be tied to Apple Pay and ONLY Apple is allowed access to the NFC for a system wide payments system (yes I know it is possible for apps to access NFC -- this is not  app based but is integral to the system).  Because Apple doesn't allow other companies access to the Apple Pay base infrastructure Apple could be claimed they could be charged with tying one service to another with advantages that competitors don't have.  

ETA:  no, amazon, PayPal, and others do not already have this.  This is a system level feature the others do not have access to. 

I am not expressing my own opinion on this -- just evaluating according to how things often are prosecuted today by authorities 

Full disclosure: I actually read the comments before reading the article, as I sometimes do on Apple Insider because I often learn more from them than from the actual text. My original response to your comment was much longer where I asked to which low level features you were referring. After reading the article, I edited my response down to its current form. Somehow though, you were able to answer my question even though I deleted it. Thank you for clarifying. 

tommikele

byronl said:

Exclusive to the US, of course

Probably. Banking and financial transaction regulations for cross border consumer financing presents challenges with compliance, reporting, conversion, collection and all kinds of other issues that can quickly make this kind of business unprofitable in a cross border environment. Can you imagine the expense and difficulty of an American financial institution trying to collect a $600 bad debt in a foreign country? Collection practices and regulations are quite varied from country to country. A decision not to offer it outside of the USA would be very understandable.

AppleZulu

So if I follow correctly, this would essentially have a Goldman Sachs line of credit jump in front of whatever card the user has set in Apple Pay? No thanks. Let’s hope there’s a big off button for that. 

GeorgeBMac

chadbag said:

Japhey said:

chadbag said:

Tying it in with Apple Pay opens it up to potential anti-trust problems as the competitors don’t have access to the low level Apple Pay features to offer a competing product.   

(Not commenting yea or nay on this — just pointing out the potential legal issues that may, wrongly or rightly , come from this)

Not every new thing is a reason to sound the antitrust klaxons. 

In my opinion, it was only a matter of time until Apple offered this, as PayPal, Amazon, and many others already have similar options. 

You missed my point.  The reason this may open up Apple to anti-competive claims and maybe anti-trust from that is because it would be tied to Apple Pay and ONLY Apple is allowed access to the NFC for a system wide payments system (yes I know it is possible for apps to access NFC -- this is not  app based but is integral to the system).  Because Apple doesn't allow other companies access to the Apple Pay base infrastructure Apple could be claimed they could be charged with tying one service to another with advantages that competitors don't have.  

ETA:  no, amazon, PayPal, and others do not already have this.  This is a system level feature the others do not have access to. 

I am not expressing my own opinion on this -- just evaluating according to how things often are prosecuted today by authorities 

I agree with (what I think is) your point:   To put my own spin on it:

This could open the door to claims by the anti-corporate, big is bad crowd that Apple needs to be busted using anti-trust laws.

That doesn't mean that Apple has or will break any laws.  It just means that the haters of big corporations will see an opening, a weak spot, and try to exploit it in pursuit of their agenda (whatever the hell it is).

But, the essence (I think) of your message is that some think that every thing should be open source and available to be used by every other person and corporation:   That Apple should not be allowed to set restrictions on their products. 

[Deleted User]

chadbag said:

Japhey said:

chadbag said:

Tying it in with Apple Pay opens it up to potential anti-trust problems as the competitors don’t have access to the low level Apple Pay features to offer a competing product.   

(Not commenting yea or nay on this — just pointing out the potential legal issues that may, wrongly or rightly , come from this)

Not every new thing is a reason to sound the antitrust klaxons. 

In my opinion, it was only a matter of time until Apple offered this, as PayPal, Amazon, and many others already have similar options. 

You missed my point.  The reason this may open up Apple to anti-competive claims and maybe anti-trust from that is because it would be tied to Apple Pay and ONLY Apple is allowed access to the NFC for a system wide payments system (yes I know it is possible for apps to access NFC -- this is not  app based but is integral to the system).  Because Apple doesn't allow other companies access to the Apple Pay base infrastructure Apple could be claimed they could be charged with tying one service to another with advantages that competitors don't have.  

ETA:  no, amazon, PayPal, and others do not already have this.  This is a system level feature the others do not have access to. 

I am not expressing my own opinion on this -- just evaluating according to how things often are prosecuted today by authorities 

Being exclusive alone doesn’t rise to the level of anti-competitive. It sounds like Apple is offering financing at its retail and online stores. Other retailers that sell Apple products already do this. 

Further other creditors can use Apple Pay to do installments for purchases at the Apple Store or online. I have a non Apple credit card in my wallet. There is nothing that stops the lender form offering no interest or low interest installment payments on purchases at the Apple store. They know who the seller is and can offer any deal they want.

In short, I think it would be really hard for anyone to build the case that allowing the loan to be accessed through NFC would actually harm anyone’s business. 

I misread the article and thought his was simply for Apple purchases. So retracting the above comment. 

GeorgeBMac

Apple has been quietly leading the pack in the area of FinTech. 

Aside from ApplePay there is the little noticed AppleCash.  We set my grandson up with it when he was 11 years old.  Now, if he needs money, me or his mom simply text it to him.  It doesn't matter if he is at home or at the local mall, the transfer is instant.  There is no need for cash, checks or even banks (even though there is one in the background).

There is talk of both China and U.S. developing a "digital currency".  But, the truth is, currency in both countries has already been 'digitized'.  Except for my favorite ice cream store that only accepts cash, I stopped using cash years ago.   First it was 90% card and 10% cash.   Now its 90% ApplePay and 10% card.  In China, I understand, ANT is the dominant method of paying for things.  (But, it's the banksters most opposed to digital currencies because, like with BitCoin, people will be able to transfer money amongst themselves without the use of banks.)

A while back, I remember reading a story about London shop keepers who have stopped taking cash:   Not only is it difficult to manage but it encourages crime such as robberies.   Nobody holds up a cashier to get her credit card receipts.   Like wise, 55 years ago as a stock boy at a local grocery store, I was regularly asked to walk a bag of $20,000-$25,000  over a1/4 mile to the local bank -- and then carry change back to the store (damn was that heavy!).  Given the choice of cleaning the restrooms or walking $20+ grand to a bank I would have happily chosen the rest rooms!

Keep going Apple!

Your FinTech efforts are not only helping people but society as well.

GeorgeBMac

AppleZulu said:

So if I follow correctly, this would essentially have a Goldman Sachs line of credit jump in front of whatever card the user has set in Apple Pay? No thanks. Let’s hope there’s a big off button for that. 

I wouldn't see it as "a jump".   Just another option.   The person can still pick who they choose for a loan.

MplsP

With the exception of big ticket items like houses & cars, If you can’t afford it, you probably shouldn’t be buying it.

I realize there are many people living paycheck to paycheck for whom things like an unexpected car repair can be a major financial crisis, but in general part of the reason so many people are in trouble is because of buy now, pay later programs like this. A better option would be ‘save now, buy later,’ but the banks don’t make money on that.

The good side I see with this is it could theoretically be an much lower cost alternative to a payday loan advance, so instead of going to a payday loan place that charges exorbitant fees someone could use this feature to defer the cost for a couple of weeks without the fees. If that’s what they end up doing.

As far as antitrust goes, this isn’t much different from a credit card offering the opportunity to skip a payment. Used properly, a credit card is also ‘buy now, pay later.’ For most cards, you have anywhere from 28-56 days before you need to pay for a purchase, depending on when in the billing cycle you actually make it.

AppleZulu

GeorgeBMac said:

AppleZulu said:

So if I follow correctly, this would essentially have a Goldman Sachs line of credit jump in front of whatever card the user has set in Apple Pay? No thanks. Let’s hope there’s a big off button for that. 

I wouldn't see it as "a jump".   Just another option.   The person can still pick who they choose for a loan.

There are people who aren't looking to borrow money and pay off their cards each month. They're going to want an "off" switch that doesn't require fumbling around with each transaction to avoid borrowing money. There are others who have borrowed money and are seeking to move to the not-borrowing-money category. They're probably not going to want an extra line of credit poking at them each time they make a purchase, either. 

[Deleted User]

AppleZulu said:

GeorgeBMac said:

AppleZulu said:

So if I follow correctly, this would essentially have a Goldman Sachs line of credit jump in front of whatever card the user has set in Apple Pay? No thanks. Let’s hope there’s a big off button for that. 

I wouldn't see it as "a jump".   Just another option.   The person can still pick who they choose for a loan.

There are people who aren't looking to borrow money and pay off their cards each month. They're going to want an "off" switch that doesn't require fumbling around with each transaction to avoid borrowing money. There are others who have borrowed money and are seeking to move to the not-borrowing-money category. They're probably not going to want an extra line of credit poking at them each time they make a purchase, either. 

Where in the article does it state that iPhone users s will be auto enrolled in this program? And where does it say that it will be made the default and the only option to change payment will be to go into wallet and select something else?

it doesn’t. You have made these things up and declared them problems. This is pretty much the definition of concern trolling. 

tommikele

AppleZulu said:

So if I follow correctly, this would essentially have a Goldman Sachs line of credit jump in front of whatever card the user has set in Apple Pay? No thanks. Let’s hope there’s a big off button for that. 

You didn't follow at all correctly. Not even close. Your statement could not be more incorrect. If you wish to utilize this particular "buy now, pay later" program, Goldman Sachs is the bank providing the financing. You may pay for your purchases any way you want, you choose, you decide. Nothing automatic. But if you want this program, they are the bank. Find an offer from someone else if you don’t like this.

your "big off button" would make such purchases more expensive by eliminating competition in consumer lending for those wishing to buy Apple products.

Do you seem to think some other bank that offer such programs is somehow more moral, ethical, etc. than they are? Wake up. Pay cash or finance.

Do you have an Apple Card? Yes? Guess who the bank is.

I never cease to be amazed how people so technically astute can have such a lack of understanding about finance even after it has been laid out for them word by word.

mike1

chadbag said:

Tying it in with Apple Pay opens it up to potential anti-trust problems as the competitors don’t have access to the low level Apple Pay features to offer a competing product.   

(Not commenting yea or nay on this — just pointing out the potential legal issues that may, wrongly or rightly , come from this)

Not true at all. Nothing stopping PayPal/Venmo or anybody else from partnering with a financial institution to offer the same options and functionality through their existing apps.

meterestnz

We have Zip NZ and a couple of other providers who offer exactly this 4 x 2 weekly payments at many retailers who sign up for the service. It’s viewed by many as a way to spread cash flow without using a credit card or your bank. No fees are paid by the customer it can be activated by the website or App on any brand phone 

AppleZulu

tommikele said:

AppleZulu said:

So if I follow correctly, this would essentially have a Goldman Sachs line of credit jump in front of whatever card the user has set in Apple Pay? No thanks. Let’s hope there’s a big off button for that. 

You didn't follow at all correctly. Not even close. Your statement could not be more incorrect. If you wish to utilize this particular "buy now, pay later" program, Goldman Sachs is the bank providing the financing. You may pay for your purchases any way you want, you choose, you decide. Nothing automatic. But if you want this program, they are the bank. Find an offer from someone else if you don’t like this.

your "big off button" would make such purchases more expensive by eliminating competition in consumer lending for those wishing to buy Apple products.

Do you seem to think some other bank that offer such programs is somehow more moral, ethical, etc. than they are? Wake up. Pay cash or finance.

Do you have an Apple Card? Yes? Guess who the bank is.

I never cease to be amazed how people so technically astute can have such a lack of understanding about finance even after it has been laid out for them word by word.

You have to click through and read the Bloomberg article to learn that the "pay later" service will require the user to first submit an application. The AppleInsider article here doesn't mention that, and by only describing it in the context of individual purchases (It is claimed customers making an Apple Pay purchase will have the option to break down the cost to four interest-free payments made every two weeks, or across multiple months with interest. The four-payment option is apparently called "Apple Pay in 4," while the latter is called "Apple Pay Monthly Installments."), it created an impression at least for me that these options would simply start popping up as the user is carrying out an individual transaction. So the Bloomberg article at least indicates that it's an "opt-in" program, not a "just you try to opt out" program. That is at least good. No off button should be required, then.

As for Goldman Sachs, no, I don't have an Apple Card, in part because of the outsized influence and role GS played in the housing bubble and subsequent worldwide economic collapse just over a decade ago, among other things. There is plenty of awfulness to go around in the finance industry, particularly among the "too big to fail" banks and finance corporations, but some are still worse than others. Just look at last week's news about Wells Fargo. 

Credit can be a useful tool for people to manage their resources and respond to unexpected expenses. Predatory practices are too often the default in the industry, however, and I'm not going to apologize for being wary of new "conveniences" that are offered, particularly when they include language like "It also apparently won't require a credit check to be run against the user... ," which sounds like being nice, but too often is really an indication of a strategy to trap people in a world of high-interest hurt, because they took on more debt than they can repay.