Apple Expands Apple Pay with Buy Now Pay Later Loans from Affirm
Apple Pay users will soon have the option to use buy now pay later (BNPL) loans on their iPhones and iPads, thanks to a new partnership between Apple and fintech company Affirm. This move is part of a collection of features that will be introduced in the upcoming Apple iOS 18 and iPadOS 18 this fall. The confirmation of this partnership came from both Apple’s post-WWDC roundup of features and Affirm’s Security and Exchange Commission filing on June 11.
Apple already offers its own BNPL system called Apple Pay Later, which allows users to purchase products on credit and pay for them in interest-free installments. However, it is notable that Apple is allowing a third-party competitor like Affirm to operate within its app ecosystem. This decision speaks to Affirm’s strong brand and offerings in the BNPL space.
In addition to the partnership with Affirm, Apple also announced that U.S. users will have access to installment payments through debit and credit cards provided by Citi, Synchrony, and Fiserv. This further expands the convenience and flexibility of Apple Pay for users.
The popularity of BNPL financing has been on the rise in recent years, particularly due to financial insecurity brought on by the pandemic. It offers an easy way for consumers to make purchases without having cash on hand. However, there are risks associated with BNPL, especially for financially vulnerable individuals. It is easy to accumulate debt by being enticed by the option to pay in small amounts. The Consumer Financial Protection Bureau has warned about the potential pitfalls of BNPL financing, highlighting the importance of responsible borrowing.
Fortunately, BNPL companies like Affirm, Klarna, and Afterpay are now classified as money lenders. This classification grants consumers the rights to dispute charges and demand refunds, providing them with greater protection when using these services.
Although Apple did not announce the Affirm partnership during its WWDC keynote, it was mentioned in the follow-up press release. The focus of the event was primarily on Apple Intelligence and other notable features, which may explain why the partnership was not highlighted. While there is no official release date for iOS 18 or iPadOS 18, some of the features announced are already available in the iOS 18 developer beta.
Overall, the addition of Affirm’s BNPL loans to Apple Pay expands the payment options available to Apple users, providing them with more flexibility and convenience when making purchases. However, it is crucial for users to exercise responsible borrowing and be mindful of their financial circumstances when utilizing these services.
