Apple has teamed up with China's Ant Financial Services Group, which owns the AliPay Mobile Payments Network, and several local banks offer an interest-free loan to customers who want to buy a new iPhone through the company's local online store. The goal is to reduce the monthly sums Chinese customers have to pay for brand new iPhones.
The Alipay service has over 700 million active users in China.
These latest finance dealers are good for buyers with money who can now borrow money at no cost to buy Apple products online and pay for the units in monthly installments over 3, 6, 12 or 24 months. Credit card issuers issued by three state-owned Chinese banks may also receive 24-month interest-free funding to purchase Apple gadgets.
Stella Yifan Xie, writes for The Wall Street Journal:
While such loans are interest-bearing, free to buyers and can incite them to make big-ticket purchases, retailers are in effect footing the finance costs. In such events, retailers typically pay lenders a pre-fee which is a small percentage of a product's price. The consumers then pay the lenders over time.
The minimum purchase to qualify for the 0 percent loan is 4,000 yuan, or about $ 595. The iPhone 8 cost starts at 5,099 yuan on Apple's China website, which amounts to about $ 758. The new iPhone XR has a starting price of 6,499 yuan , or about $ 967 against its US $ 750 exit price.
Customers in old models can get cheaper installments.
The new funding offers are available through Antwerp's Huabei service (Huabei means "just spend" in Chinese). Huabei has informed customers that it could temporarily increase its credit limits to buy Apple products. As many as one in four Chinese aged 30 or younger use the service, which acts as a virtual credit card.
Apple has a store at Alibaba's online marketplace, where Huabei users have been able to get interest-free funding for one year to buy iPhones and other Apple products. The current 24-month financing offer will be closed on March 25, and Apple told users of Alipay.
It should be noted that the supposed time-limited iPhone XS / XR purchasing bid in China was already extended. Originally, it was scheduled to expire on February 17, but Apple on Valentine's Day updates the website with the new expiration date March 25. This may indicate that revenues from the iPhone XR / XS in other countries may get an extension as well.
This is an important initiative on Apple's part and clearly one of the latest countermeasures that the Cupertino company has employed to revive grateful iPhone sales.
Of course, this is hardly the first time Apple has offered interest-free financing on iPhone purchases. A similar financing agreement was made on 42 brick and mortar Apple Stores in China last month. A similar program launched in Australia earlier this month, where customers can qualify for an interest-free loan for the purchase of Apple products over $ 1000 AUD.
The iPhone manufacturer also has similar deals in place elsewhere around the world, including trading-up promo in the United States that entices customers to upgrade to an iPhone XR from $ 449 or an iPhone XS from $ 699 if they shop in their iPhone 8 or iPhone 7 Plus.