Guest Column | June 21, 2022

What Retailers Should Know About Apple's Pay Later Rollout

By Shannon Flynn

Apple Business Chat

Internet of things (IoT) connectivity has given retailers plenty of new opportunities to connect with customers. It helps refine marketing campaigns, organize storefronts and learn how shoppers spend their time in-store. Now, retail IoT could help businesses make bigger sales.

In an announcement about the upcoming iOS 16, Apple announced the arrival of Pay Later, a buy-now-pay-later (BNPL) service, to Apple Pay. While the service targets consumers, it presents a promising business opportunity for retailers.

How Does Pay Later Work?

Pay Later splits users’ purchases into four equal payments spread across six weeks. The first time someone uses it, Apple will perform a quick soft credit check, which most users will likely qualify for, as they do with similar apps. Like other BNPL services, it charges no interest or fees.

While services like Splitit already feature Apple Pay support, Pay Later has the advantage of being built directly into the Wallet app. Once users update to iOS 16, they won’t have to download any new apps or trust a company they don’t know to access BNPL services. They can then break payments into smaller installments anywhere that accepts Apple Pay.

Businesses that accept Pay Later won’t notice any difference in their payments. They’ll receive the full ticket price in full at the time of purchase, leaving the customer to pay it off to Apple over the next six weeks. Pay Now will launch with iOS 16 when it releases in the fall of 2022.

How Retailers Can Capitalize On Pay Later

BNPL services are arguably more exciting for retailers than for consumers who use them. When customers can divide purchases into smaller, more manageable payments, they’re more likely to spend more. While some people may think twice about spending $200 at one time, paying $50 once every two weeks makes it sound more affordable.

Consequently, retailers who accept Apple Pay could see shoppers spending more per sale. They may also see more sales, as the convenience of splitting payments will entice new customers. Retailers experience an average 22% increase in conversions after accepting Afterpay, so accepting Apple’s Pay Later will likely yield similar results.

Accepting Apple Pay comes at no additional cost to retailers, so businesses that don’t already support it should consider it. Common retail IoT devices already support these payments, so you may not have to do anything. Any point of sale system with near-field communication (NFC) support will accept Apple Pay by design. Installing these devices will let shoppers use Pay Later on anything they buy in-store, leading to more sales and bigger purchases.

Potential Challenges To Consider

Some retailers may have concerns around Pay Later and similar BNPL services. Since these apps make it easier for people to take out loans, some people consider them predatory. As these feelings become more prominent, BNPL services may fall out of fashion, taking their increased sales with them.

As a business, you don’t have to disclose contingent losses if they’re unlikely or mostly uncertain. So, if Pay Later declines in popularity, causing losses, you won’t likely encounter any regulatory difficulty. Since it doesn’t cost you anything to support, these damages also will be minimal.

Some states are expanding BNPL regulations, which could restrict the services. While these laws won’t likely affect what you must do as a business, they may restrain profits and increased sales from accepting BNPL.

Technology Gives Retailers New Ways To Impress Customers

Overall, Apple’s Pay Later service is a promising step forward for retail IoT. Stores that have NFC-enabled POS systems can entice more purchases and larger sales with minimal if any, costs. While the future of BNPL itself may be uncertain, stores that accept it can expect at least some short-term gains.

About The Author

Shannon Flynn is a technology blogger who writes about AI and IT trends. She's also the Managing Editor of and freelances for sites like IoT for All, ChatbotNewsDaily, and more. Follow her on Medium or MuckRack to read more tech news.