Apple’s kind of a bank now

This isn’t $Apple (AAPL.US)$ ’s first foray into finances, but, as Bloomberg notes, it is the first time it’s taking on financial responsibilities including credit checks and lending. It currently partners with $Goldman Sachs (GS.US)$ to carry out these tasks for its Apple Card credit card, with the financial firm playing a smaller, but not insignificant part in Apple’s new Pay Later service. People will have to use Apple’s Mastercard-based credit card, which is issued by Goldman Sachs, in order to use Pay Later. Bloomberg notes that Apple Financing doesn’t have its own bank charter (so no, Apple’s technically and legally not a bank).
BNPL services have come under fire for the potential risk they pose to consumers, and Apple’s Pay Later is no exception. Customers who use these services are more likely to overdraft, and many struggle to repay their loans. Existing BNPL services like Klarna, Affirm, and Afterpay have come under scrutiny from government regulators over the potential risks they pose to consumers.