Apple Pay Later, iPhone-maker's BNPL Service, Will Let Users Split Up Purchases...
source link: https://apple.slashdot.org/story/22/06/06/1740240/apple-pay-later-iphone-makers-bnpl-service-will-let-users-split-up-purchases-into-four-payments-at-no-interest
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Apple Pay Later, iPhone-maker's BNPL Service, Will Let Users Split Up Purchases Into Four Payments at No Interest
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The short term interest rates are around 3-4% (CD rate itself is 2%). Paying over a year is equivalent of 6 months of interest. So Apple is losing 1.5-2% for each such transaction. Additionally, paying over the year is a default risk (given that Apple Card is only available on Apple phone, may be this risk is low as Apple users are comparatively better off). Do the card holders still continue to earn cash back?
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So if this costs an extra 1.5%, then it will eat much of the transaction fees, but Apple probably still comes out ahead. If it is instead of 1% cash back, then it's hardly a significant cost at all.
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Probably the same way others do, they wait for people to pay a day late then charge. the full amount of interest for the year + fees + fines +++ etc. Also making sure your reminder emails get "lost" to make sure everyone pays late.
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Probably not. Apple does not want to get a reputation for sleazy business practices.
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They don't seem that worried to me...
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Well, maybe. We will find out. At least in my case indirectly, because I do not touch the Apple stuff. The value-for-money ratio is just way too bad and I have no interest in joining a cult to supply the other part of the experience.
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app store 30% cut covers this!
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They can "afford" it by having found out that they will likely make a profit off all the idiots that will spend more as result of this poisoned offering. Also, Apples has enough mass to insure any business risk from this, so that insurance (or rather the reserves) comes at no cost to them.
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How they can afford it?
They have the money and this will ruin all the competition, wait for their howling protests in 3, 2, 1....
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How can they afford it!? How narrow do you think their margins are?
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The short term interest rates are around 3-4% (CD rate itself is 2%). Paying over a year is equivalent of 6 months of interest. So Apple is losing 1.5-2% for each such transaction.
When all of your products are priced at 3X what they're worth, you have a 200% cushion to work with. So 2% is a drop in the bucket.
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How much extra margin Apple makes by convincing a customer to buy the "Pro" variant of the iPhone 13 compared to the "non-Pro" variant? How much extra margin Apple makes by convincing a customer to buy the "Pro" model compared to an iPhone SE? That's how they can afford it. They have smart people running the numbers and have figured out that any delinquencies are worth the extra margin they'll bag thanks to this. One thing is for certain, there is no shortage of people who will happily go into debt to have
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It's a good answer, except don't most people with phones beyond what they can afford upfront already buy them monthly through their carrier?
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They wouldn't be doing it if there wasn't a market. There are people who want to go prepaid.
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They dot his for their own products already. Generally the purchase is divided into 12-24 payments. This was also done with the old Barclays card.
Almost every credit card has an installment option. They do charge a monthly fee which represents a reduced interest. However if you donâ(TM)t pay, you get charged full interest on top of the interest you prepaid.
So if one pays in full every month, Apple loses money. But many are not going to pay in full, so still pay interest. Apple is not doing the card
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