So, should you use Apple Pay Later? That question raises another question — one that BNPL providers have struggled with since the rise of digital money. How sustainable is the overall model?
Low- or no-interest loans aren’t a new idea. Pre-digital providers like credit cards and payday lenders generally profited by offering sensible terms for fixed periods of time, then bombarding users with predatory rates and fees should any payment come late. Pioneers of digital BNPL like Klarna do charge fees, but those fees are nowhere near as severe or long-lasting as credit card debt or defaulting on a loan. Arguably, however, that’s why services like Klarna have struggled to maintain long-term profitability in recent years. Other notable digital BNPL players like PayPal have generally stayed solvent by treating financing as a fairly small part of their overall business.
On paper, Apple seems like an excellent candidate to beat those odds and deliver a more user-friendly product. Klarna, after all, is a 20 year old startup and BNPL is its only business. Apple is, by most measures, the largest company on Earth. In part, that’s good news for users: Apple has a reputation to maintain and has put years into the development of its BNPL option. The company is also touting Pay Later’s ties to more conventional financing options via Mastercard and Goldman Sachs. That is likely to mean robust support options and potentially desirable new features.
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