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Apple launching Apple Pay Later to take on Klarna and Affirm in the US

The iPhone maker's expansion into financial services continues.

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US tech giant Apple is making a huge move into the buy now, pay later space, with the announcement of Apple Pay Later last night at its annual developer conference.

The headline features are that Apple Pay Later will let shoppers split purchases into four payments over six weeks, with no fees or interest charges, and will work anywhere in the US that Apple Pay is accepted.

As well as making payments, Apple is upgrading its Apple Wallet to track, view and repay Apple Pay Later purchases.

The launch will likely be a further blow to Klarna and Affirm, which have both had a tough few months with tumbling share prices and layoffs respectively.

Apple has long been reported to be working with Goldman Sachs on a ‘pay later’ service, and the tech giant’s decision to acquire UK fintech Credit Kudos in March was also rumoured to be connected to its buy now, pay later plans.

Apple Pay Later is coming as part of Apple’s iOS 16 iPhone software update which, if following Apple’s typical release cycle, will arrive mid-September.

It’s not the only update coming to Apple Pay, as earlier this year unveiled ‘Tap to Pay’ letting merchants use their iPhones to accept payments.

However, far from being a challenge to fintechs like Square and Zettle, Apple is opening the feature up for developers to use, again starting with iOS 16 later this year.

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