Apple Inc said on Wednesday that it expects to use its corporate balance sheet to pay loans for its upcoming Apple Pay Later service. According to them, the treasury department will determine the exact procedure for funding the loans, and funding sources may change over time. Apple Financing LLC, a wholly owned subsidiary, will manage loans and creditworthiness decisions.

Pay Later Service from Apple

This week, Apple announced the pay-later program, which allows customers to divide purchases into four equal installments over six weeks. The service will launch later this year alongside Apple’s next iPhone and iPad operating systems, putting it in direct rivalry with existing buy-now, pay-later companies like Affirm Holdings Inc and Block Inc’s Afterpay.

Apple will cover pay-later loans with cash on hand — credits – arstechnica.com

Apple’s pay-as-you-go loans will feature no interest and no fees. Apple wants to use a soft pull of a customer’s credit and other data, such as the user’s purchase and transaction history with Apple in both its shops and online services like the App Store, to determine trustworthiness.

Apple and Their Customers

Customers who want to use the pay-later service will need to link a debit card to their Apple Pay account to fund loan repayment. For approved loans, a quarter of the purchase price will be required at the time of purchase, and Apple will do an instant check, similar to other debit card transactions, to ensure there are adequate funds to make the upfront payment.

The loans will be available anywhere Apple Pay is accepted, including online and in physical retail establishments. According to Apple, payments to retailers will be processed via the MasterCard network using a payment credential issued by Goldman Sachs Group Inc. Apple Financing LLC has financing licenses in all states where pay-later services are permitted, according to the company.

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