iPhone maker Apple (NASDAQ:AAPL) launched its Apple Pay Later plan on March 28, a buy now, pay later (BNPL) program. The pre-release version of the Apple Pay Later plan was launched to a select few users yesterday and will be rolled out to the broader market in the coming months. Following the news, AAPL stock spiked nearly 7% in the extended trading session.
Apple Pay Later allows consumers to split their purchases into four installments spanning six weeks. What’s more, Apple will not charge any fees or interest on the installments since the product is designed with “users’ financial health in mind,” the company said.
The global BNPL industry is poised to be a multi-billion-dollar industry in the coming years. Some of the major players in the industry, which will be affected by Apple’s foray, include PayPal Holdings (NASDAQ:PYPL), Affirm Holdings (NASDAQ:AFRM), and Klarna. With the loyalty of millions of Apple fans, the company has a major competitive advantage in the BNPL market and is poised to capture a larger chunk.
Apple Pay Later will be available to Apple Wallet users, so they can easily track, manage, and repay their Apple Pay Later loans. Users can take out loans ranging from $50 to $1,000 within the Wallet for their online and in-app purchases on iPhones and iPads. The purchases will be authenticated using Face ID, Touch ID, or a passcode, the company added. Users can also keep a tab on their outstanding and upcoming installment dates through Wallet, and they will receive timely notifications for the same.
Furthermore, users are required to link their debit cards to their Wallet to make repayments. Credit cards will not be allowed to avoid the possibility of repaying one loan by taking on additional debt. Apple Financing LLC will handle all the credit-related assessment and lending procedures for the plan.
The company also stated that Apple Financing will share the Apple Pay Later loans with the U.S. credit bureaus starting this fall to properly reflect the user’s overall credit profile.
Is it Good to Invest in Apple?
Apple is undoubtedly one of the largest tech players in the world. On TipRanks, AAPL stock has a Moderate Buy consensus rating based on 24 Buys, six Holds, and one Sell rating. The average Apple price forecast of $170.18 implies 7.9% upside potential from current levels. Meanwhile, AAPL stock has gained 26.2% so far in 2023.