iPhone’s New Buy Now, Pay Later Button in iOS 16 Takes on Affirm and Amazon: Here’s How It Works


This story is part of WWDC 2022CNET’s full coverage of Apple’s annual developer conference.

What’s happening

Apple has announced a new free funding feature in Apple Wallet that allows you to pay for purchases for free over time.

Why it matters

As inflation continues to impact households, “buy now, pay later” services have become a popular payment option, and Apple’s entry is likely to become a major player.

What’s next

Apple Pay Later starts with the release of iOS 16, which is expected in September 2022.

Short-term installment loans “Buy now, pay later” Services provide consumers with an easy way to pay for purchases over time, typically with no fees or interest. At this week World developer conferenceApple announced its own Buy Now, Pay Later product, Apple Pay Later, which will officially launch with the release of the new one iOS16 for iPhone in September. A new feature of Apple Wallet, Apple Pay Later lets you split the cost of certain goods and services into four payments spread over six weeks for free.

Apple Wallet is the iPhone’s digital wallet app that offers three main services: Apple Pay, Apple Card and Apple Cash. With Apple Pay, you can store debit and credit cards and make purchases online or in businesses. Apple Card is a credit account issued by MasterCard and Goldman Sachs that works like a regular digital credit card; and Apple Cash enables peer-to-peer payments.

Apple’s push into free financing comes at a time when many retailers are accepting payments from BNPL apps such as BNPL Affirm, Klarna or Afterpay. Most of these apps offer similar short-term interest-free payment plans, while others also offer longer-term variable-rate installment plans.

We’ll share everything there is to know about Apple Pay later in this article, including how it works, where it’s accepted, and when it will be available. Apple also introduced Pay Later and iOS 16 new versions of his MacBook and iPad. Here is everything that Apple has announced at WWDC.

How does Apple Pay Later work?

Apple Pay Later lets you split the cost of purchases into four equal payments spread over six weeks. The first payment is due upon purchase, with the remaining payments every two weeks thereafter.

Once Apple Pay Later is released, you’ll have two options when completing a purchase: Pay in Full and Pay Later. If you select the latter option, a payment schedule will appear showing the amount of each of the four payments and when they are due.

According to Corey Fugman, Senior Director for Wallet and Apple Pay, speaking about Wallet during the WWDC keynote, Apple Pay Later will be “available wherever Apple Pay is accepted, in apps or online,” indicating that the Service may not be available for physical store purchases.

Stores and merchants don’t need to make any changes to accept payments through Apple Pay Later. Transactions are processed as before – the only difference is how back-end payments are processed.

MasterCard Installments — the credit card company’s white-label BNPL service — will power merchant payments for Apple Pay Later. According to Bloomberg, Apple and its banking partner Goldman Sachs began plans for Apple Pay Later in July last year.

When can I use Apple Pay Later on my iPhone?

Apple Pay Later will be included in iOS 16, the next planned update of Apple’s operating system for the iPhone. That iOS 16 beta is already available for developers who have an account. In the WWDC keynote, Apple indicated that the first public beta of iOS 16 will be released sometime in July.

Apple has traditionally released its latest operating systems to the public at the same time as its latest phones, as was the case with the iPhone 13 and iOS 15 in September last year. The iPhone 14 is expected to come out in September this year, and it’s likely that iOS 16 will also be released at the same time, or almost at the same time.

How is Apple Pay Later different from Apple Card Monthly installments?

Apple Card Monthly Installments is an Apple program that allows you to fund the purchase of certain Apple products if you use the Apple card Credit card. The length of the 0% APR period for these purchases depends on the product. Installment plans range from six months to two years.

Apple Pay Later is not limited to Apple products, nor does it require the use of the Apple Card. Apple Pay Later lets you fund purchases with an Apple-designated debit card, as long as it’s connected to Apple Wallet. Also, the interest-free payment period for Apple Pay Later – six weeks – is much shorter than the payment plans offered by Apple Card Monthly Installments.

What else is new in Apple Wallet for iPhone?

Another new feature in Apple Wallet announced at WWDC is Apple Pay Order Tracking, which gives merchants the ability to provide customers with detailed receipts and delivery status for purchased products through Apple Wallet.

Apple also announced expanded support in Apple Wallet for driving licenses and ID cards. Following Colorado and Arizona ID cardsApple Wallet expects to support 11 more states in the near future.

These driver’s licenses can be used at select Transportation Security Agency checkpoints. They can also be shared with other apps that require identification, such as B. Alcohol purchases through Uber Eats.

Apple Wallet also adds support for sharing keys for locations like hotels, offices, or cars. New features allow users to share keys with friends or co-workers via email, text messages or other messaging apps.

Like Apple Pay Later, Apple Pay order tracking, driver’s license, and key-sharing features will be made available to the public with the full release of iOS 16, which is expected in September 2022.

What other online services allow you to buy now and pay later?

Some existing online payment systems offer this “Buy now, pay later” short-term financing similar to what Apple Pay Later offers. PayPal Pay-in-4 program works very much like Apple Pay Later, except purchases are capped at $300 to $1,500.

The BNPL app Sezzle also uses a system of four payments over six weeks, but allows users to defer a payment up to two weeks later for free and defer more payments for an additional fee.

Other BNPL apps like Affirm and Klarna offer interest-free short-term installment plans or longer-term installment plans with a variable interest rate.

For more information on WWDC, see upcoming macOS VenturaNew Fitness and training features for the Apple Watch and all New features announced for Apple Maps.

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