![]() ![]() ![]() Mike Taiano, a senior director at Fitch’s North American Banks Group, sees it simply. Instead, it appears the company made a product for the people who love Apple, aimed at persuading them to make more use of the Wallet app and Apple Pay. That all points to Apple not making Apple Pay Later to woo existing “buy now, pay later” customers away from the services they use. Adults who make between $50,000 and $100,000 are most likely to use “buy now, pay later.” Research from The Ascent also shows that 45% of those customers are using “buy now, pay later” to afford something that didn’t already fit into their budgets. are Gen Z or millennials, according to a report from eMarketer. Third-party surveys consistently show that Apple customers have higher incomes and spend more than Android users.Ībout three-quarters of pay-later users in the U.S. Those existing Apple customers differ from the kind of customer “buy now, pay later” companies have talked about serving: typically a younger person, turned off by credit cards. “They could miss out, but it could also be an intentional strategy if you’re going to focus on those customers that will pay upfront with Apple Pay,” he said. Apple doesn’t need to compete with other pay-later companies for exclusive contracts with retailers, he said, and can focus on continuing to monetize loyal Apple consumers. “It’s a different mindset,” said Patrick DellaValle, director in the financial services practice at Guidehouse. (Apple Card has its own pay-over-time feature, but only for Apple products.) Customers must link payments to a debit card, not a credit card like the Apple Card.Īpple’s advantage is the wide reach of iPhones among consumers and Apple Pay among merchants - particularly at retail, where the pay-later companies are trying to use cards to boost usage. The wallet will also show users their Apple Pay Later plans and the payments due over the next 30 days, Apple said.Ĭonfusingly, Apple Pay Later is almost completely separate from Apple’s other venture into consumer credit, the Apple Card. Customers who do will be able to complete the payment across four charges, spread out over six weeks. Users will be prompted to check out using Apple Pay Later any time they use Apple Pay, or can configure loans directly in the wallet. Other tools are the virtual and physical cards that allow customers to pay online or in-store, like Affirm’s Debit+ card or the Klarna Card.Īpple Pay Later lives in Apple’s digital wallet, an iPhone feature the company has been trying to build up. The pay-later companies are trying to extend their reach through financial super apps, which allow customers to apply for payment plans even when there’s not a deal in place with a retailer, though that takes more steps than pressing a button at checkout. ![]() Reducing or eliminating “friction” is a “huge factor” in helping sign customers up, said Harry Kohl, a director at Fitch Ratings. The tight integration is meant to boost conversions. Many of these partnerships are exclusive, allowing a company like Klarna, for example, to be the only pay-later provider for customers checking out at Macy’s. The most popular pay-later providers have a straightforward primary marketing strategy: partner with retailers that typically feature their logos at checkout, prompting customers to pay over time. Second, the customers Apple is targeting have habits that differ markedly from traditional “buy now, pay later” users. For one, Apple is marketing its pay-later offering to customers in an entirely different place than competitors. ![]()
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