Apple starts to roll out 'Pay Later' service after long delay

Jeenah Moon/Bloomberg

Apple began rolling out its first buy now/pay later service after a lengthy delay, entering a field currently dominated by Affirm, Klarna and others.

The service, called Apple Pay Later, will divide purchases into four payments, spread over six weeks, with no interest or fees. It resides in the iPhone's Wallet app, with users able to borrow amounts of $50 to $1,000 from Apple. 

The feature was first unveiled in June of last year as part of a broader push into financial services. Apple Pay Later was expected in September, but took several more months to be ready. The company said that a "pre-release" version of the service will be available for users on a "randomly selected" basis and that it plans to introduce it for all customers in the "coming months." 

In a new approach for the company, Apple will be funding the loans via a new subsidiary called Apple Financing. The company will also be handling its own credit checks and running the other underlying technologies needed to power the service, an arrangement that contributed to the delays, Bloomberg News has reported. Apple also said Tuesday it will begin reporting its loans to U.S. credit agencies in the fall. 

Apple partnered with Mastercard's installments program to power parts of the feature, while Goldman Sachs is the payment credential issuer used to complete transactions. Apple Pay Later requires iOS 16.4, which the company released on Monday. The iPhone maker also rolled out Apple Music Classical, a new classical music streaming service that works with Apple Music.