Apple’s move into BNPL is disappointing, to say the least
Apple’s creation of a Buy Now, Pay Later (BNPL) subsidiary brings it ever closer to converge with banking and should be seen as little more than an attempt to legitimize a credit system designed to make money from the unwary.
The company’s decision to increase its range of financial services should be a wake-up call by the banking industry. Instant consumer credit, which traditional banks could have developed more responsibly than the new fintech companies that are encouraging young people to spend beyond their means, is now being invaded by the very companies whose products are being financed.
The possibility of financing in four interest-free payments a range of products like Apple’s, is tempting people to make wrong purchasing decisions, in an environment where risk analysis is conspicuous by its absence. How do BNPL-type services make money? Quite simply, through the crippling interest payments they impose on consumers who are unable to make any of the payments on time. Let’s be honest here: this is about taking advantage of the most financially vulnerable people, saddling them with a negative credit history, and a breach of Apple’s much-vaunted principles of social responsibility, because it relies on the irresponsibility of users to sell a few more of its products.
