Apple's ethical dilemma: Was Apple Pay Later the right move?

This week, Apple introduced Apple Pay Later. If you’re not familiar with Buy Now Pay Later (BNLP) it allows users to split purchases into four payments with zero interest and no fees.

As the title reads, Apple is entering the sleazy world of Buy Now Pay Later. BNLP has gained a reputation for being “sleazy” or problematic for several reasons. Some reasons include:

  1. Targeting vulnerable consumers: BNPL providers often target vulnerable consumers who may not have the funds to make purchases outright or who are struggling financially. This can lead to consumers taking on debt they cannot afford and falling into financial hardship.

  2. Lack of transparency: Some BNPL providers do not provide clear information about their fees, interest rates, and other terms and conditions, which can make it difficult for consumers to understand the true cost of using the service. This lack of transparency can be seen as deceptive or sleazy.

  3. High fees and interest rates: As mentioned earlier, BNPL options often come with high fees and interest rates, which can make them expensive for consumers. This can be seen as taking advantage of vulnerable consumers who may not fully understand the costs involved.

  4. Encouraging overspending: BNPL options can encourage consumers to overspend, as they may be more likely to make purchases they cannot afford if they are able to spread out the payments over time. This can lead to consumers taking on more debt than they can handle.

Apple Pay Later debt will also come with financial risk for Apple. Credit assessment and lending will be handled by Apple Financing LLC, a subsidiary of Apple, not a third party.

The financial risks are real. Scott Galloway recently wrote: “Four out of five BNPL customers said they use the service to avoid credit-card debt. And now nearly a third of them can’t afford the BNPL debt. One behind-on-her-payments Klarna customer told the BBC, “I wasn’t too worried because my credit score was quite good. The next time I checked, it had nearly halved.””

“Klarna racked up $700 million in losses last year, and 65 percent of it was from credit defaults. Affirm lost almost the same over the past 12 months, while its marketing expenses tripled to $427 million. Any hope of profitability depends on overextended consumers somehow making their payments and continuing to mash the BUY button. What’s more likely is that the precarious finances of the 20-something generation are going off the precipice soon, and there’s a big risk of collateral damage. The 24-year-old out there defaulting on his Klarna payments isn’t going to ruin just his credit score. The 27-year-old who lost all her money trading options on Robinhood and is trying online gambling to get it back isn’t going to be a leech on just her parents when she zeroes out. The 35-year-old mother who refinanced her home to buy bitcoin isn’t going to cost just her daughter her college fund.”

The Verge: “Missed and late payments, coupled with a volatile economy, have led Klarna’s valuation to reportedly tumble by a third — from $46 billion last year to $30 billion — and has also caused Affirm’s share price to drop.”


“Attaching something as risky as BNPL to Apple’s brand puts Pay Later at odds with the company’s goal of providing customers with technology and services they can generally feel good about. As the big quote from Apple CEO Tim Cook on Apple’s Ethics and Compliance page reads, “We do the right thing, even when it’s not easy.””

This doesn’t seem like the right move for Apple. What the fuck are you thinking anyway?

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