Apple Pay Later financing isn't being handled by a bank...but by Apple

Using Apple Pay on an iPhone
(Image credit: / LightField Studios)

One of the most intriguing announcements to come out of WWDC 2022 was the launch of Apple Pay Later.

A new service that lets users split a payment made using Apple Pay into four equal payments over six weeks, without incurring interest or late fees, Apple Pay Later was warmly welcomed by users looking for more flexibility when making big purchases. 

Apple has now revealed more details on exactly how the service will run, including the rather major detail that it will actually be managing the finances and lending involved in Apple Pay Later itself.

Show Apple the money

According to a report from Bloomberg, the company will use its Apple Financing LLC subsidiary for the credit checks and loan decisions for the new service.

This is despite Apple itself not having an actual bank charter that would allow it to act much like a normal bank does, with its current services - including the likes of Apple Card and Apple Cash - supported by third-party banking partners.

The company's existing financial services partners, which include the likes of Goldman Sachs and Mastercard, will most likely play a significant but smaller role in helping Apple Pay Later run smoothly.

Apple has been looking to bring more financial services in-house in recent years as it looks to achieve more control and oversight of its customer's data.

Bloomberg adds that Apple is reportedly also working on its own payment processing engine, dubbed Breakout, that should give it more freedom and flexibility, and is also developing tools for fraud analysis and interest calculations.

There's been no official confirmation of these claims from Apple, so we'll have to wait and see if any of this comes to fruition, but given the company's past success in bringing other parts of the technology ecosystem in-house, as seen with its M1 and now M2 hardware, such a move wouldn't be surprising.

Mike Moore
Deputy Editor, TechRadar Pro

Mike Moore is Deputy Editor at TechRadar Pro. He has worked as a B2B and B2C tech journalist for nearly a decade, including at one of the UK's leading national newspapers and fellow Future title ITProPortal, and when he's not keeping track of all the latest enterprise and workplace trends, can most likely be found watching, following or taking part in some kind of sport.