Well, this is a first. In March 2023, Apple introduced the Apple Pay Later (Buy Now Pay Later) feature for Apple Pay users. This feature lets eligible US Apple Pay users split their payments into four installments over six weeks without paying interest or fees. Eligible Apple Pay users in the US can apply for loans of up to $1,000 to buy things and pay in four installments. Until last week, the payment behavior of users using this service didn’t affect their credit history.
However, starting February 28th, the payment history of anyone using this Buy Now Pay Later (BNPL) feature will now be added to the user’s credit report, thanks to Apple’s partnership with Experian. So, if you use Apple Pay Later from now on, your credit payment data will be reflected in Experian’s credit reports. In the foreseeable future, this data will likely be considered when calculating your credit score, affecting the ease and terms and conditions for obtaining future credit.
After announcing this partnership, Apple’s Vice President of Apple Pay and Apple Wallet, Jennifer Bailey, said: “We designed Apple Pay Later with our users’ financial health in mind, and an important part of this is ensuring that their loans are reflected in their overall financial profiles. By reporting Apple Pay Later loans to Experian, we aim to promote greater transparency and responsible lending for both borrowers and lenders, while giving users the opportunity to further build their credit.”
In the same spirit, Jennifer Schulz, CEO of Experian North America, also applauded Apple for taking this meaningful first step and looks forward to working with other leading BNPL providers.
The integration of credit payment data from wallet apps like Apple Pay or Google Pay could be crucial in the next couple of years, especially for users who hope to acquire credit in the future. For instance, for students and other people with limited credit history, this could boost their credit history by utilizing the small loans offered by BNPL providers and paying them back on time.
This partnership is also a clear sign of how impactful mobile wallet payments have become in the financial economy. In 2022 alone, Statista reported that mobile wallets like Apple Pay and Google Pay accounted for over half of e-commerce transaction payments.
Now that some wallets offer some form of credit to their users, credit reporting agencies like Experian must pay attention to this increased usage of mobile wallets. As Experian’s North America noted, we will likely see more partnerships between credit-tracking companies and BNPL providers in the near future.
