Of course they charge the retailer for this, but at the same time insist that the pay-in-3 option cost the same as paying cash, effectively inflating the price for everyone who can afford to pay upfront.
I'm not completely sure I'd agree with that. The retailer makes less on the pay-later sales, but that's only relevant if a significant number of people choose that option who would otherwise have made the same purchase all in one lump. Otherwise any reduced per-item margins are more than made up for by increased sales volume overall, which is why retailers choose to participate in these schemes in the first place.
What scares me about these schemes is that they market themselves as "budgeting tools" - as distinct, somehow, from "credit". There has been quite a lot in the news recently about this; seems the idea that "pay later == effectively free" is actually a thing that the Instagram generation genuinely believes to be true.
"pay later" appeals to those who cannot get or do not have "good credit" (which is to say a credit card). These deals were called "the installment plan" by retailers a generation ago. You'd go to your local department store like Sears and buy a couch and take it home and you'd pay Sears directly some amount of money each month until the couch was paid off. It was a way for Sears to sell couches to people who didn't have the full purchase price in cash at the time of the sale. Remember that 30 years or so ago, most people didn't have and couldn't get credit cards.
At some point the retailers started issuing their own store credit cards. The main difference between a credit card and the installment plan is that the former offers "revolving credit," which is to say, you can pay off the entire balance each month and incur no interest charges, or you can pay off some smaller balance, get charged interest for what you don't pay, and then the balance rolls over, and new charges just add to it.
You can see where this lead: Sears and others basically formed "banks" to manage the credit card operations. In the meantime, the traditional banks started expanding their offering of credit cards, and this lead to making it easy for anyone with a pulse to get a credit card. After all, the retailers like it as it moves product, and the banks like it, as they charge usurious interest for the people who can't pay in full each month.
We've reached the point where the store credit card is no more and every bank and credit union offers a range of credit cards with a range of perks, all designed to get the consumer to spend, spend, SPEND.
And that spend, spend, SPEND is dangerous for people who are financially innumerate and can't keep track of the spending and the interest, and it's dangerous for people who know full well they can not pay off the cards and avoid interest, but they need to buy necessities. (This latter point is part of the whole notion that "it's expensive to be poor.")
Now the full circle: installment plans are back. Apple was already doing them, in a sense: you could get approved for a credit card offered by an Apple partner, and charge the purchase of the new MacBook Pro to that card, and you could pay it off in a year, and there would be no interest charged if you paid the correct monthly amount. (Of course everyone knows Apple decided to get into the credit game and partnered with Goldman Sachs for the Apple Card, which is just another credit card but one with incredibly shitty customer service and management features. Fuck you, I don't want to manage my finances on a phone, thank you.)
This latest version of installments is back to the original idea: get products into the hands of customers who don't have the cash on hand and don't have credit. Apple isn't the only player in this field, but because they're Apple, they get all of the press.
I wonder two things.
One, since this isn't a credit card, does Apple report transactions (payments or lack of, balances, etc) to the usual credit data mining businesses Equifax et al? If not, then it does nothing for customers who need to build credit for other use (car loans, mortgages, mainly).
Two, what happens if the customer misses payments?
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