Photo via 9to5macNext

Apple Pay Later will use your past spending habits to decide your credit worthiness

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Apple's upcoming "buy now, pay later" service will evaluate customers' eligibility for borrowing based on their past purchases and spending habits, according to a Bloomberg report. The service will assess your eligibility based on your purchases at its retail stores, App Store transactions, and even the peer-to-peer transfers you've made using Apple Cash. Whether or not you've previously applied for an Apple Card, your spending habits using any other card linked to your Apple Pay, and which Apple devices you own will also factor into the amount the company will lend you.

Apple first announced the "buy now, pay later" feature for Apple Pay in June 2022, with a plan to launch it later that year. The service allows customers to split the cost of purchases into four equal installments paid over six weeks, without incurring any additional interest or fees. Testers have reportedly been seeing loan approvals for as much as $1,000. Image credit: CNBC, Apple Inc. Apple will track spending data via the user's Apple ID, and the Pay Later option will be surfaced automatically in the Apple Pay purchase sheet if it's available. Apple Pay Later is expected to launch soon, initially in the United States.

The service is the first Apple financial service to be backed by the company itself, and Apple's own cash balances will backstop the loans. If a customer defaults on an Apple Pay Later product, they may not be offered the chance to use it again, and other features of their Apple ID may be disabled until their account is back in good standing. Down the road, Apple may also add alternative payment options that extend loans over longer periods of time, with potential interest charges. Image credit: Notion Wizard The lending criteria are part of a broader push into financial services, which is seen as a big growth opportunity for Apple, but also one with potential pitfalls. The Pay Later service was originally expected last year, but faced delays during development and was indefinitely postponed. The service is currently undergoing a large field test with Apple Store retail employees included in the trial. The feature is currently dormant in the Wallet app code in iOS 16.3, and Apple has the ability to roll it out with a flip of a backend switch at any time.

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Published to Apple Scoop on 15th February, 2023.