"Move Aside Financial Firms"… Apple Launches Direct Loans and Credit Evaluation with Buy Now, Pay Later Service

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Apple has decided to directly handle core financial tasks such as lending and credit evaluation for its upcoming buy now, pay later service, 'Apple Pay Later,' which will be launched in the U.S. next month. Until now, Apple had relied on third-party financial institutions like Goldman Sachs, but it is now showing its intention to take a step further and build its own financial business.

According to Bloomberg and other sources on the 8th (local time), Apple stated in response to Bloomberg's inquiry that Apple Financing LLC, a payment business subsidiary operating independently from the headquarters, holds the necessary licenses for lending. When Apple launched Apple Pay Later on the 6th, it announced that users could purchase items first and then pay the purchase amount in up to four installments over six weeks without fees or interest.

Bloomberg reported that this is the first time Apple has decided to directly handle core financial tasks such as lending, risk management, and credit evaluation. Until now, Apple had entrusted core financial tasks like credit evaluation to financial companies during its financial business operations. Goldman Sachs was responsible for credit evaluation and lending. Although Goldman Sachs is not completely excluded this time, its role has been significantly reduced to only issuing installment-related certificates, Bloomberg explained.

With this announcement, Apple appears to be gradually expanding from a simple payment service into the realm of traditional financial services. Bloomberg analyzed, "As part of the initiative called 'Break Out,' Apple is striving to handle many elements of financial services in-house," adding, "In addition to lending, credit checks, and screening, Apple is developing its own payment processing engine. It is also preparing new customer service features, fraud analysis, and interest rate calculations."

Apple is expected to expand its financial business based on its strong financial power. As of the date, Apple's market capitalization stands at $2.39 trillion (approximately 2,515 trillion KRW), and its cash holdings as of the end of Q1 amount to $200 billion. Bloomberg noted, "Nevertheless, Apple will not take on excessive risks," and added, "Apple Pay Later transactions will be conducted with limitations based on the user's credit transaction history."

This content was produced with the assistance of AI translation services.