Apple is a sort of bank now

According to reports from Bloomberg and CNBC, Apple will handle loans for its new Buy Now, Pay Later (BNPL) service, and it doesn't plan to transfer that responsibility to a financial service. Instead, the company's subsidiary, Apple Financing LLC, is reportedly licensed to provide lending services and will remain separate from Apple's core business.

Apple announced its Pay Later, at its annual Worldwide Developers Conference (WWDC) on Monday. The service will allow users to make a purchase through Apple Pay and then pay that amount in four equal installments over the course of six weeks with no interest.

This isn't Apple's first foray into finance, but as Bloomberg points out, it's the first time it's taken on financial responsibilities, including credit checks and loans. It's currently partnering with Goldman Sachs to carry out these tasks for its Apple Card credit card, and the financial firm plays a minor, but not insignificant, role in Apple's new Pay Later service. People will have to use Apple's Mastercard-based credit card, issued by Goldman Sachs, to use Pay Later. Bloomberg points out that Apple Financing does not have its own banking charter (so no, Apple is technically and legally not a bank).

According to CNBC, Apple will run soft credit checks when a person applies for its Pay Later service. The outlet also reports that Apple won't extend additional credit to users who don't make payments, and they won't count against a user's overall credit score either; Apple reportedly won't report late payments to credit bureaus. It's unclear how much Apple will allow users to spend, but CNBC predicts that Apple Pay Later will be capped at around $1,000. We also don't know if Apple will charge a late fee, and the company didn't immediately respond to The Verge's request for comment.

Apple's move to consolidate financial services under one, albeit separate, roof indicates a potentially tougher push in finance ahead. It also points to a broader goal of keeping users in its ecosystem. With Apple offering access to your card and the new Pay Later service from within Apple Pay, you're practically forced to own and maintain your iPhone to easily use most of its features. Pay Later is set to roll out to US customers first, before expanding to other countries later.

BNPL services have been criticized 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 overdraw and many have difficulty paying their loans. Existing BNPL services such as Klarna, Affirm and Afterpay have come under scrutiny from government regulators for the potential risks they pose to consumers.