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‘Apple Pay Later’ debuts in U.S. with no interest, no fees guarantee

The Yahoo Finance Live team discusses Apple's announcement of it's new 'Apple Pay Later' program.

Video transcript

SEANA SMITH: It's time for our Triple Play, three stocks that we're watching in the final 30 minutes of trading. We've got Apple, Paramount, and McCormick. First up, let's take a look at Apple. The company is now a player in the buy now, pay later industry after unveiling its new service Apple Pay Later.

Now, here's how it works. Apple said that users can apply for loans of $50 to $1,000 and could be used for purchases made on iPhones and also iPads from sellers that are accepting Apple Pay. Users can apply for a loan through the Wallet app. And when you apply, that's not going to impact your credit. But these payments are going to be split up into at least four various payments there in order to complete that purchase.


Not everyone, though, is going to have access to this yet. The tech giant giving it to select users first and then plans to roll it out to all eligible users in the coming months. We're seeing some reaction when you take a look at some of the competitors within that space today. So Apple is down on the news. But when you take a look at PayPal, Affirm, those stocks also took a hit on the news that Apple is entering-- officially entering into this space. And Allie, Apple really sees a reason, sees a runway for growth here when it comes to buy now, pay later.

ALLIE CANAL: Certainly, if you're a competitor, this is devastating news, considering the hold that Apple has in the tech space. I don't know why this makes me a little nervous because for me, when I use Apple Pay, I'm constantly whipping out my phone, tap, tap, tap. I don't even know how much I'm spending on. And even though there's no interest rates, no fees, like you said, it's not going to negatively impact your credit score, you do have to put a debit card down. And if you don't have enough cash in your account at the time of the repayment, you'll likely get dinged a fee from your bank.

So the cautious spender in me is like, I don't know if this is a great idea. However, you do have more options for consumers and for Apple services business.

SEANA SMITH: You get a lot more people using Apple Pay in that regard.

DAVE BRIGGS: You're speaking my language. I just want to say thank you for that. By the way, you saw Affirm down 9 plus percent. That is a massive hit on this news. But yeah, my reaction is as a parent. Yes, this is a great investor story. This is a great Apple story. I think it's terrific. I think they're going to take over banking.

But let me just reiterate what Seana said. No interest, no fees, no impact to your credit score, and no theory, no accountability, if you're these young people-- with all due respect-- who have no concept of what $1 is because they simply swipe their phone and forget about it. They never held that money, they held that paycheck. My children are teenagers, don't ever carry cash, nor a credit card. This compounds the problem that they have no accountability for the money. Your kids are too young.

SEANA SMITH: No, no, I know they are too young. And I totally--

DAVE BRIGGS: This is terrifying as a parent.

SEANA SMITH: --agree with what you are saying. But I also say I think you can make that very similar argument when it comes to credit cards. A lot of people don't realize that what they are putting on credit cards needs to be paid by a certain time, or else your interest is going to go up. You're going to end up owing more than what you actually paid for whatever products you did buy. I agree. You got to talk a lot more about finances within the Briggs household.

DAVE BRIGGS: We all do, man.

SEANA SMITH: And yes, in my household. So, yes, that is for sure.

ALLIE CANAL: Yeah, maybe, if anything, it will spur more conversations about how to handle your money.

DAVE BRIGGS: Probably not, but I hope you're right.

ALLIE CANAL: We'll never know.