Apple’s wholly owned subsidiary will review user credit and issue short-term loans for users to help them prepare for its upcoming short-term loan service Apple Pay Later.

It will face competition from similar offerings. AffirmAnd PayPalThe announcement of, took place during Apple’s developer conference on Monday. Apple Pay users can purchase Apple products later this year and make the remaining payments in six equal installments. This product is often known as Buy Now, Pay Later.

Apple has joined forces with Mastercard,It interacts directly with vendors to offer a white-label product called Installments in BNPL. This is what Apple uses. Goldman SachsAccording to the company, Apple also acts as the official BIN sponsor and technical issuer for the loans. Apple does not use Goldman’s credit decisions nor its balance sheet to issue the loans.

Apple’s brand new loan product and its behind-the scene structure, including the fact it handles loan decisions, credit checks, lending, all indicate that Apple wants to make financial services more in-house.

Apple has increasingly broken into the fintech industryHowever, the strategic approach of its Wallet App and Financial Services is to increase its iPhone’s value and utility to users, so they will continue to buy Apple hardware.

Apple Pay Later’s loans are not likely to prove to be of any practical use in the near-term, but they do suggest that Apple could make more money by using its huge balance sheet in order to offer financial services. Apple had $378.55 million in revenue for 2021.

Apple will perform a soft credit assessment to make sure that the borrower is likely to repay the loan, likely at a maximum of $1000. Apple Pay Later loans that aren’t paid back will be canceled and the credit granted to those users won’t be extended again. It won’t report missed payments to credit bureaus.

Apple Pay Later is the first to launch in America. Apple Card is the other credit product of Apple. It’s still available in the United States only.