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Well, given that there is no interest, it doesn’t seem to me that it’s particularly exploitative. It is, effectively, allowing you to buy someone you can’t yet

by borski 3y ago

Well, given that there is no interest, it doesn’t seem to me that it’s particularly exploitative. It is, effectively, allowing you to buy someone you can’t yet afford, but without exploiting you. If anything, it’s a significant help. As another example, it allows you to purchase a new laptop while selling your old one, such that you don’t hVe time without one at all.

paxys 3y ago
There is absolutely interest if you can't keep up with the payment schedule, which is what every BNPL provider counts on. That is exactly why they push products that they know people can't afford and which have no resale value.
- borski 3y ago
  What? iPads have tons of resale value. Apple’s Pay Later has zero interest and a cap of $1000 of credit. People are going to buy a new iPad whether Apple gives them an easier way to do it or not; the difference is with Apple’s Pay Later they’re only on the hook for the cost of the device, and not additional interest monthly on top of that. And iPads are very resellable. What are you talking about?
  - paxys 3y ago
    They take a 30% or greater hit the second you take them out of the packaging, and even more after a newer version is released. Consumer electronics are not an appreciating asset. You will never be able to pay off the original debt by selling it.
    - borski 3y ago
      Sure, and you’re not intended to. You’re buying a product that presumably, to you, has value. Apple is offering to let you have their valuable product by paying it off over time with zero interest. That’s it. The point is that instead of laying the cash out upfront you can use that cash to generate income while you also have your valuable product you wanted to buy. Not sure why that’s hard to parse.
  - bombcar 3y ago
    Apple's BNPL just splits the cost over X months charged to you, I believe. Many of the other 0% interest over 24 months hit you with all the accumulated interest at 30% if you don't pay off in full in that 24 months.
    - borski 3y ago
      Precisely. And I am not defending the “interest free for a while but you’ll never pay it off and then get hit with 30%” crowd, although I do think it’s laid out pretty clearly in the paperwork. People do choose to live beyond their means. It’s a massive mistake. But that’s not what Apple is doing here.
- rpdillon 3y ago
  The article's author seems to have tried to find penalties, but came up empty. > Compared to other BNPL schemes, this writer hasn’t found anything about late payment fees, debt collection, or charges that kick in upon non-payment of a scheduled amount. I did 45 seconds of research and found Apple's official confirmation: > Apple Pay Later doesn't charge any fees or interest, even if your loan account goes past due. https://support.apple.com/en-us/HT213543 https://support.apple.com/en-us/HT213543
  - paxys 3y ago
    Only because it is in pre release and not yet available to the general public. Apple isn't a fountain of free money. Of course they will collect on loans. Affirm for example routinely sells past due debt to collection agencies. Has Apple said they won't do the same?
  - matthewdgreen 3y ago
    I would imagine that (as in any business) you want to offer the best possible terms early in the product lifecycle when it's subject to the most attention, and you want new adopters to be comfortable with it. Then you can add fees and penalties later on once you have a stream of customers dependent on it.
lxgr 3y ago
Without knowing the details of Apple's offering in particular, often there is "no interest" only in the way that overdraft charges and/or insufficient balance fees are not labeled as interest... And even if you do manage to pay everything on time, on average you're better off with a credit card (pay after 30-60 days, i.e. 45 days average, and get at least 1.5% cashback vs. pay in four installments over 6 weeks, i.e. 3 weeks average, and get no cashback). Merchant fees for BNPL are also higher than they are for credit cards, as far as I know. > As another example, it allows you to purchase a new laptop while selling your old one, such that you don’t hVe time without one at all. You can do the same with a credit card – you'll have at the very least 30 days to do so without paying a cent of interest. For most BNPLs, the first installment is due immediately at the time of purchase.
- borski 3y ago
  Credit cards are not the same, as they are general purpose and cause people to often spend beyond their means because of the concept of a minimum payment and interest. It’s awful, if you keep a balance, and many do because they have no other choice (can’t pay for food or rent, for example) but many also do because they live beyond their means (which is a huge mistake). But that isn’t what Apple is doing, and the details matter. Apple Pay Later lets you split a purchase into four equal payments over six weeks with no interest or fees; not years without a thought of paying it back. There isn’t even a hard credit inquiry, so it doesn’t hurt your credit. The only fees of any kind associated with Apple Pay Later are insufficient funds fees or overdraft fees from your bank if you don’t have sufficient funds.

by borski 3y ago

paxys 3y ago

There is absolutely interest if you can't keep up with the payment schedule, which is what every BNPL provider counts on. That is exactly why they push products that they know people can't afford and which have no resale value.

borski 3y ago
What? iPads have tons of resale value. Apple’s Pay Later has zero interest and a cap of $1000 of credit. People are going to buy a new iPad whether Apple gives them an easier way to do it or not; the difference is with Apple’s Pay Later they’re only on the hook for the cost of the device, and not additional interest monthly on top of that. And iPads are very resellable. What are you talking about?
- paxys 3y ago
  They take a 30% or greater hit the second you take them out of the packaging, and even more after a newer version is released. Consumer electronics are not an appreciating asset. You will never be able to pay off the original debt by selling it.
  - borski 3y ago
    Sure, and you’re not intended to. You’re buying a product that presumably, to you, has value. Apple is offering to let you have their valuable product by paying it off over time with zero interest. That’s it. The point is that instead of laying the cash out upfront you can use that cash to generate income while you also have your valuable product you wanted to buy. Not sure why that’s hard to parse.
- bombcar 3y ago
  Apple's BNPL just splits the cost over X months charged to you, I believe. Many of the other 0% interest over 24 months hit you with all the accumulated interest at 30% if you don't pay off in full in that 24 months.
  - borski 3y ago
    Precisely. And I am not defending the “interest free for a while but you’ll never pay it off and then get hit with 30%” crowd, although I do think it’s laid out pretty clearly in the paperwork. People do choose to live beyond their means. It’s a massive mistake. But that’s not what Apple is doing here.
rpdillon 3y ago
The article's author seems to have tried to find penalties, but came up empty. > Compared to other BNPL schemes, this writer hasn’t found anything about late payment fees, debt collection, or charges that kick in upon non-payment of a scheduled amount. I did 45 seconds of research and found Apple's official confirmation: > Apple Pay Later doesn't charge any fees or interest, even if your loan account goes past due. https://support.apple.com/en-us/HT213543 https://support.apple.com/en-us/HT213543
- paxys 3y ago
  Only because it is in pre release and not yet available to the general public. Apple isn't a fountain of free money. Of course they will collect on loans. Affirm for example routinely sells past due debt to collection agencies. Has Apple said they won't do the same?
- matthewdgreen 3y ago
  I would imagine that (as in any business) you want to offer the best possible terms early in the product lifecycle when it's subject to the most attention, and you want new adopters to be comfortable with it. Then you can add fees and penalties later on once you have a stream of customers dependent on it.

lxgr 3y ago

Without knowing the details of Apple's offering in particular, often there is "no interest" only in the way that overdraft charges and/or insufficient balance fees are not labeled as interest... And even if you do manage to pay everything on time, on average you're better off with a credit card (pay after 30-60 days, i.e. 45 days average, and get at least 1.5% cashback vs. pay in four installments over 6 weeks, i.e. 3 weeks average, and get no cashback). Merchant fees for BNPL are also higher than they are for credit cards, as far as I know. > As another example, it allows you to purchase a new laptop while selling your old one, such that you don’t hVe time without one at all. You can do the same with a credit card – you'll have at the very least 30 days to do so without paying a cent of interest. For most BNPLs, the first installment is due immediately at the time of purchase.

borski 3y ago
Credit cards are not the same, as they are general purpose and cause people to often spend beyond their means because of the concept of a minimum payment and interest. It’s awful, if you keep a balance, and many do because they have no other choice (can’t pay for food or rent, for example) but many also do because they live beyond their means (which is a huge mistake). But that isn’t what Apple is doing, and the details matter. Apple Pay Later lets you split a purchase into four equal payments over six weeks with no interest or fees; not years without a thought of paying it back. There isn’t even a hard credit inquiry, so it doesn’t hurt your credit. The only fees of any kind associated with Apple Pay Later are insufficient funds fees or overdraft fees from your bank if you don’t have sufficient funds.