Apple created a subsidiary to handle Pay Later loans

The company is bringing more financial services in-house.


When its Pay Later service launches alongside iOS 16 later this year, Apple plans to handle lending decisions on its own. According to Bloomberg, the tech giant has established a subsidiary called Apple Financing to conduct credit checks and customer approvals. The new firm will operate separately from Apple, but it has obtained the necessary state licenses to offer the feature.

While Apple has dabbled in financial services before, it did so with the help of institutions like Goldman Sachs. The investment bank is still involved in Apple Pay Later. According to Bloomberg, the firm will issue the Mastercard payment credentials customers will use to complete purchases, but it won’t handle lending and credit assessments like it currently does with Apple Card.

The move sees Apple attempting to replicate a strategy that has worked for it in the past. The company has invested significant time and money to develop in-house versions for many of the components that power its computers and mobile devices. Outside of helping make its products more compelling to consumers, the strategy has allowed Apple to lessen its dependence on external suppliers like Intel and potentially increase its revenue. And it appears Apple hopes to achieve a similar outcome on the financial services front.

According to Bloomberg, the company is working on its own payment processing engine as part of an initiative dubbed — not so subtly — “Breakout.” It’s also developing tools for fraud analysis and interest calculations, among other customer-facing features. As with Apple’s push into subscriptions with services like TV+ and Fitness+, the company likely sees those efforts as a way to keep current iPhone, iPad and Mac customers tied to its ecosystem.