As the financial initiatives of tech giants continue rapidly, on June 6, Apple introduced a massive feature for the Pay service, which has not yet been deployed in Turkey. The company gives Apple Pay users a “buy now pay later‘ announced that it will begin providing services. However, during the event, the company did not share any details about how it will provide this service.

Today, these questions were answered by Bloomberg. Upon reaching Apple, Bloomberg received a response about what Apple would do to provide the service to users. Essentially, Apple able to make loans to customerswill also act as a finance company that can perform risk management and credit assessments of its clients.

Apple will pay its customers directly

In addition, according to the details shared, Apple, like the credit card service Apple Card, will not be affiliated with any other financial company† Working with the Goldman Sachs Group to evaluate the credit card, Apple will under its own responsibility, under the umbrella of “Apple Financing LLC,” offer the “buy now, pay later” service. In other words, the company gives its customers money from its own vault.

Apple Pay Later, a pay-now-now service that is catching up with Apple all tech companies, allows customers to make Apple Pay payments. the option to split into four interest-free installments over a six-week period will present. The company will not partner with any bank on this short-term service. But according to Bloomberg, Apple is working on a service that will include monthly installments. This service will likely require collaboration with another bank.

So how can Apple monetize this service with no interest?

Actually, the answer to this question is quite simple. Users will be given the option to split their payments into four installments instead of paying them in one go. they will be able to shop in larger volumes† A SFGate study of pay-it-now services found that customers who previously spent $100 in one go increased their spending on the service to as much as $365. In other words, customers spend nearly 3 times that got high. It was also emphasized that this increase was mainly experienced in the Z generation.

On the other hand, another study by Morning Consult shows the opposite of this system. can harm companies showed. The value of Klarna, which took advantage of this service due to customer payment delays, fell from $46 billion to $30 billion.

In addition to all these services like Affirm, Klarna, Zip, Afterpay and PayPal, which offer buy now, pay later services, have started to enter the radar of the authorities. Recently, the US Consumer Financial Protection Bureau accused these companies of “debt accumulation, regulatory arbitrage and data collection in the consumer loan market that is rapidly changing with technology.” examined† Likewise, the UK has introduced stricter rules for businesses that buy now, pay later.