Apple introduces affordable service of payment for iPhones, iPad customers

Apple Inc has launched a new easier and more affordable payment service for its customers to boost sales. The phone maker has introduced "buy now, pay later" (BNPL) service in the US.

The service, Apple Pay Later, will allow users to split purchases into four payments spread over six weeks with no interest or fees, the iPhone maker said. It will initially be offered to select users, with plans for a full roll-out in the coming months.

Customers can get loans between $50 and $1,000 for online and in-app purchases made on iPhones and iPads with merchants that accept Apple Pay, according to the company.

The feature was first unveiled in June of last year as part of a broader push into financial services. Apple Pay Later was expected in September, but took several more months to be ready.

More than 85% of US retailers accept Apple Pay, the company said.

The move is likely to threaten to disrupt the fintech sector dominated by firms like Affirm Holdings and Swedish payments company Klarna.

In 2020, Covid-related lockdowns turned shoppers to online payment platforms, bolstering demand for fintech companies offering BNPL services, especially to millennials and Gen Z customers.

In America, PayPal and Block Inc expanded into the BNPL sector through acquisitions, while Affirm went public in a multi-billion dollar listing.

The sector's fortunes have since turned as rising interest rates and red-hot inflation dampened purchasing power and forced consumers to tighten their purse strings.

Apple Pay Later is enabled through the Mastercard Installments program. Goldman Sachs was the issuer of the Mastercard payment credential.

Apple Pay Later requires iOS 16.4, which the company released on Monday. The iPhone maker also rolled out Apple Music Classical, a new classical music streaming service that works with Apple Music.