Apple plans to fund loans for its forthcoming Apple Pay Later service off its company steadiness sheet, the corporate stated on Wednesday.

Apple stated its treasury division will resolve the precise mechanism it would use to fund the loans and funding sources might shift over time. Loans and creditworthiness choices shall be dealt with by an entirely owned subsidiary, Apple Financing LLC.

Apple introduced the pay-later service this week, providing to separate purchases up into 4 equal funds over six weeks. The service will launch later this 12 months together with Apple’s newest working techniques for iPhone handsets and iPad tablets and can put it into competitors with current buy-now, pay-later companies akin to Affirm Holdings and Block’s Afterpay.

Apple’s pay-later loans could have zero curiosity and no charges of any variety. To choose creditworthiness, Apple stated it plans to make use of a smooth pull of a buyer’s credit score and different information, such because the buyer’s buy and fee historical past with Apple in each its shops and on-line companies such because the App Store.

To use the pay-later service, Apple prospects should join a debit card to their Apple Pay account to fund reimbursement of the loans. 1 / 4 of the acquisition worth for accepted loans shall be due on the time of buy, and, like different debit card transactions, Apple will run an prompt verify to make sure there are adequate funds to cowl the upfront fee.

Apple will supply the loans wherever that Apple Pay is accepted, each on-line and in bodily retail shops. The funds to retailers shall be revamped the MasterCard community via a fee credential issued by Goldman Sachs Group, Apple stated.

Apple Financing LLC has lending licenses in all US states the place such pay-later companies are allowed, it added.

© Thomson Reuters 2022