Apple will handle credit checks and Apple Pay Later loans

Apple on Monday announced the new “Apple Pay Later” service, which will allow iOS users to pay in installments via an option in the Wallet app. Now, according to a Bloomberg report, Apple will manage the loan alone without a partner bank.

Specifically, the company will use its subsidiary Apple Financing LLC for credit checks and loan decisions for the new service, as this subsidiary has all the necessary licenses to operate certain banking services. Until now, all financial services provided by Apple, such as Apple Card and Apple Cash, were supported by third-party banks such as Goldman Sachs.

For Apple, this is a big step towards reducing its reliance on other partners for its own services. Earlier this year, Bloomberg previously reported on Apple’s “Breakout” project, which aims to bring all payment processing and financial infrastructure in-house.

Of course, as the report notes, Apple’s partners like Goldman Sachs and Mastercard will still keep a “small role” in the new Apple Pay Later program since Apple doesn’t have a banking charter.

In 2019, Apple began offering interest-free installment payments to Apple Card owners purchasing a new iPhone. The offer was then extended to other products but remains limited to the Apple Store and the Apple Card. With Apple Pay Later, every Apple Pay user in the United States will be able to pay in installments at any store.

The company has also reportedly developed its own fraud analysis, rewards and interest calculation system. With approximately $200 billion in cash and huge profits every quarter, Apple is certainly one of the few companies in the world with enough resources to provide its own financial services.

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