Report: Apple and Goldman Sachs Are Developing a Fancy Form of Consumer Debt

Apple is reportedly working with Goldman Sachs to develop a new consumer debt scheme for customers that is internally being called “Apple Pay Later.’

Apple Insider reports that Apple is rumored to be working with Goldman Sachs to launch “Apple Pay Later,” a “buy now, pay later” payment system for Apple Pay users. Currently, there are only a few companies involved in the buy now, pay later (BNPL) market, but it’s fast becoming a profitable industry as worldwide spending habits change.

The Financial Times states that BNPL is best used for expensive purchases. The FT cites the Affirm BNPL company’s partnership with Peloton to spread the cost of a $1,900 exercise bike over a number of months as an example of how the system is most often used.

The FT also notes that many users are taking advantage of the low initial cost to buy not one expensive item, but many cheap ones. Around one-fifth of the UK population has used BNPL in the last year, with 90 percent of transactions being for fashion and footwear.

BNPL becomes particularly profitable after the initial interest-free period ends. The FT reports that the Klarna BNPL service currently offers credit up to 18.9 percent APR when a user defers payments between 6 and 36 months. Similarly, Affirm can charge between 10 percent and 30 percent APR.

Apple launched its own credit card, the Apple Card, with the promise of making repayments easy and clear. It would appear that “Apple Pay Later” would aim to do the same thing while also putting products in the hands of consumers that they might not be able to afford.