Apple to finance its own BNPL product

Apple plans to provide the financing for its new Buy Now, Pay Later product.

The Cupertino, Calif., technology company said Apple Financing, a wholly owned subsidiary, will provide the loans for Apple Pay Later. Apple will use Installments, Mastercard’s white label BNPL product. 

Goldman Sachs will issue the credentials for Apple to connect to merchants through Mastercard. While the investment bank is the technical issuer of the loans, Apple will hold the loans. 

Apple will be able to earn interchange fees from customers’ transactions. Conversely, the company will be responsible for vetting customers’ creditworthiness and it will take any hits from defaults. 

Apple said it will not report missed payments to credit bureaus. 

The move is the next step for Apple Pay, which the company introduced in 2014.