There’s a Privacy Angle on Apple’s Decision to Finance Apple Pay Later on Its Own

Buried at the end of The Financial Times’s report on Apple Pay Later last week (syndicated here at Ars Technica):

Apple said its decision to go it alone was in part taken to avoid
sharing personal data with third parties. The company will not
charge fees for late payments, in line with Klarna and Affirm, but
will restrict access to further short-term credit.

Makes me wonder what Klarna and Affirm et al. are doing with customer data for BNPL purchases. From a Fast Company story on BNPL companies last month:

Until now, the dominant narrative explaining BNPL’s success is
that consumers — particularly, younger ones — are hungry for
financing options that are less predatory than credit cards with
their 15% average APR. But there is more to the story. Due to
privacy changes, most notably the tracking restrictions that Apple
made available to iPhone users in April 2021, retailers have not
been able to target customers through platforms like Meta, which
owns Facebook and Instagram, as they had before. Nor can they
definitively attribute an e-commerce sale to a digital ad. BNPL
companies, thanks to their increasingly robust apps and email
lists, can solve both those problems. Moreover, they have an
advantage over social media and digital advertising in
understanding consumers’ credit, and, by extension, their buying
power. Even as they undercut credit cards, BNPL companies are, by
design, amplifying consumer spending. Consumers can still get a
fair deal with BNPL products, provided they stay within their
budgets and pay on time. But they should understand who BNPL
companies are actually working for.

Spoiler: the retailers.

In its early days, in the mid-2010s, BNPL had a relatively simple
job. By offering to break a purchase into monthly payments at the
point of sale, BNPL could reduce cart abandonment, a common
problem for larger-ticket items, especially those being sold by
startup brands such as Casper Sleep and Peloton. Leading BNPL
players claim that they can increase checkout conversion rates by
20% to 30%. “We are in the business of bringing [merchants] new
customers, increasing their cart size, increasing their
conversion at point of sale,” Affirm cofounder and CEO Max
Levchin said last year.

Apple Pay Later appears to simply be in the business of allowing users to split purchases into multiple payments, interest-free, with complete privacy.

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