It looks like spending habits are changing quite a bit.
According to reports, Apple and Goldman Sachs have teamed up to bring a new type of consumer debt to the market. Apple Pay Later will allow users to buy now and pay later, much like a credit card.
Unlike a credit card though, Apple Pay Later only works with certain brands who are signed up to the program.
Some have pointed out that this move could usher in an era of corporate feudalism, but to me there is really no difference between this and credit card companies.
The only difference I can think of is that big tech and investment banks are now trying to run the consumer debt show, as opposed to credit card companies and consumer banking chains.
Let’s take a look at this new effort:
— Stock Market News (@StockMKTNewz) July 19, 2021
New story: Apple plans “buy now, pay later” service with Goldman Sachs to add monthly payments to any Apple Pay purchase. Includes “Apple Pay in 4” four interest-free payments or multi-month installments, rivaling Affirm and PayPal. https://t.co/lCCm2v6WQG
— Mark Gurman (@markgurman) July 13, 2021
Apple Insider reports on the new credit product:
Apple’s rumored extension to Apple Pay is seen as a potentially lucrative move because of who this type of buy now, pay later facility appeals to.
Apple has not announced that it will team up with Goldman Sachs to launch “Apple Pay Later,” yet the very rumor has caused shares in rival firms to drop. As yet there are only a few players in the buy now, pay later (BNPL) market, but it’s becoming increasingly profitable as worldwide spending habits change.
BNPL lets buyers spread the cost of purchases out over time, initially without accruing the kind of interest fees that most credit card companies charge.
Buy Now Pay Later
-Reports suggest Apple will launch an EMI scheme
-Apple Pay payment system will enable this with the help of Goldman Sachs
-Interest-free weekly option for 4 weeks OR with interest for months
-The scheme could help drive ApplePay adoption@CNBC_Awaaz
— NEERAJ BAJPAI (@NeerajCNBC) July 14, 2021
Apple is reportedly working with Goldman Sachs to offer a “buy now, pay later” service that would compete with companies like fintech lender, Affirm. #fintech $AAPL $GS $AFRM pic.twitter.com/6icAm56zrO
— Michael A. Gayed, CFA (@leadlagreport) July 18, 2021
Breitbart didn’t seem too keen on this potential new product:
BNPL becomes particularly profitable after the initial interest-free period ends. The FT reports that the Klarna BNPL service currently offers credit up to 18.9 percent APR when a user defers payments between 6 and 36 months. Similarly, Affirm can charge between 10 percent and 30 percent APR.
Apple launched its own credit card, the Apple Card, with the promise of making repayments easy and clear. It would appear that “Apple Pay Later” would aim to do the same thing while also putting products in the hands of consumers that they might not be able to afford.
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