Apple, Affirm to launch 'buy now, pay later' programme for Canadian purchases

Ottawa

APPLE Inc and Affirm Holdings Inc's PayBright are planning to launch a "buy now, pay later" programme for Apple device purchases in Canada, stepping up the iPhone maker's ambitions to offer more financial services.

The companies plan to debut the initiative this month at Apple's online and physical retail stores in Canada, according to a message sent to Apple retail employees in the region.

The service will let iPhone, Mac, and iPad buyers in Canada pay for purchases over 12 or 24 months instead of in full at the time of the transaction. Apple told staff it will offer the programme interest-free for a limited time after the launch.

This will become Apple's first installment programme in Canada in several years.

Apple has offered a buy now, pay later system for Apple purchases via its Apple Card credit card with Goldman Sachs Group Inc in the US since last year, but the card isn't available internationally. Apple has also long offered monthly iPhone payment plans in some countries.

"Some customers visiting Apple want to buy now and pay later," Apple told staff in Canada. "Now, they have a new option that lets them pay over time for their favorite Apple products."

The company also told staff the programme would roll out on Aug 11.

Shares of Affirm jumped 3.3 per cent to US$66.67 at Tuesday's close, recovering from what had been a decline of about 6 per cent before news of the Apple partnership.

Canada is one of Apple's largest retail markets with almost 30 stores, coming in behind the US, China, and the UK. Apple doesn't disclose how much revenue it generates in individual countries, but about 50 per cent of smartphone sales in the second quarter last year in Canada were iPhones, according to data from Counterpoint Research.

The monthly payments system for Canada will also support downpayments via trade-ins of existing devices. While AppleCare also can be included on the installment plan for the purchase of iPhones, iPads and Macs, the new offering won't include other Apple products such as the Apple Watch and AirPods, which are supported via monthly payments in the US with the Apple Card.

The buy now, pay later space has exploded in recent months, and Square Inc agreed this week to purchase Australia's Afterpay Ltd for US$29 billion.

For Apple, the upcoming Canada system is just another step towards its expanded buy now, pay later plan.

The Cupertino, California-based company is working on a service called Apple Pay Later that will allow the cost of any item bought through Apple Pay to be spread over multiple payments. Apple is working on two versions of this service: a zero-interest plan that consists of four payments, or a plan with interest that runs over several months. BLOOMBERG