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Apple to launch buy now, pay later platform: how does it compare?
Apple has revealed it will be launching its own buy now, pay later platform, Apple Pay Later, at its recent Worldwide Developer Conference. But with almost 30 platforms available for Australians right now, how does it stack up against the competition
Apple Pay Later will initially be limited to United States customers with the goal of expanding to more regions. Australians can prepare themselves now to know whether the platform may suit their financial needs when it does hit our shores.
Introduced as part of Apple’s iOS 16 operating system, Apple Pay Later will let customers split up the cost of eligible transactions into four instalments across six weeks. This is a similar model to that of buy now, pay later (BNPL) Australian juggernaut, Afterpay.
At this point, Apple is advertising that its Apple Pay Later platform will come with no interest and no fees “of any kind”. It is unknown whether it will reveal it charges fees for late payments like many other platforms, but currently Apple Pay Later has no fees associated with it.
While Apple Pay Later currently advertises that it will not charge interest or fees of any kind, customers may need to expect that credit checks may occur. It states that access to the platform is “subject to eligibility checks and approvals”, presumably with its own internal risk assessment engine.
And it’s worth keeping in mind that earlier this year, Apple acquired UK-based open-banking credit reference agency, Credit Kudos Ltd. This may indicate that it intends to use credit bureaus or credit checking agencies when approving customers for this new, credit side of the company.
Comparing common BNPL platforms available in Australia
| BNPL provider | Where you can use it | Payment schedule | Max credit limit | Account fees | Late fees | Credit checks |
| Apple Pay Later | Wherever Apple Pay is accepted | 4 instalments over 6 weeks | Unknown | No interest or account fees. | No | Unconfirmed. |
| Afterpay | Affiliated retailers | 4 instalments over 6 weeks | $2,000 | No interest or account fees. | $10 per missed payment, extra $7 if not paid in 7 days, capped at 25% of the price or $68, whichever is lower. | No |
| Bundll | Anywhere Mastercard is used | Repay within 2 weeks. Extend up to 12 weeks for fee | Between $1K- $4K | None for basic bundle. 2-wk extension is $2.50, 12 week plan is 5%. | $10 late payment fee then account is suspended. | No check for standard bundle. Yes for superbundll. |
| CBA StepPay | Anywhere Mastercard is used | 4 instalments over 6 weeks | $1,000 | No interest or account fees. | $10 per missed payment, capped at $120 per year. Account suspended till there is enough available funds in your repayment account. | Yes, and customers’ bank accounts are checked. |
| Klarna | Affiliated retailers | 4 fortnightly payments over 6 weeks. | $1,000 | $0 for standard plans. | $0 - $3 per late payment depending on purchase size. Max $9 per purchase. | Yes |
| LatitudePay | Affiliated retailers | 10 weekly payments | $1,000 | None | $10 | Yes |
| Laybuy | Affiliated retailers | 6 weekly repayments | Undisclosed | None | $10/late payment. Extra $10 if not paid in 7 days. | Yes |
| OpenPay | Affiliated retailers | fortnightly repayments up to 24 months depending on size of purchase | Undisclosed | $0 to $5 per fortnight depending on value of purchase and length of plan | $9.50 per missed payment if not paid in 2 days. Total fees capped at $200 in first year and $125 in subsequent years. | May do credit check. |
| PayPal Pay in 4 | Anywhere PayPal is accepted | 4 instalments over 6 weeks | $1,500 | None | None | May do credit check. |
| Zip Pay | Anywhere Visa is accepted | Min $40/month | $1K - $1.5K | $7.95/month if you have money owing. | $5 after 21 days of not paying the minimum. | Yes |
Source: RateCity.com.au. Figures based on BNPL platforms in Australia as of 25/05/2022.
So, how does Apple Pay Later stack up?
Until it is officially launched with the rollout of the iOS 16 operating system, it’s hard to explore too many details about this BNPL platform. But, if you’re a big fan of using Apple Pay, and you currently use an existing Australian BNPL platform, it may be worth considering the convenience of having these transactions all within the Wallet app.
Further, if there are absolutely no interest charges or fees of any kind, it may be a more affordable BNPL platform than some of the big-name alternatives that may charge fees upwards of $50.
However, if you struggle to gain approval for credit products, it’s worth assessing whether Apple Pay Later will require hard credit enquiries when you apply. You may find that your application is rejected if you struggle with poor credit, and additional rejections and further hurt your credit score.
To compare buy now, pay later platforms currently on offer in Australia, please visit our helpful comparison page to see how different options stack up in terms of credit limits and payment frequencies.
Note: The Federal Government of Australia has announced its decision to regulate the BNPL industry under the National Consumer Credit Protection Act. As a result, BNPL providers in Australia will soon be required to comply with Responsible Lending Obligations and hold Australian Credit Licences. The new regulations may also impact the way BNPL services operate by introducing credit checks for individuals signing up for these services in the future.
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