Apple teams up with China’s Alipay on interest-free financing for new iPhone purchases

Apple has teamed up with China’s Ant Financial Services Group, which owns the AliPay mobile payments network, and several local banks to offer an interest-free loan to customers who are looking to purchase a new iPhone through the company’s local online store. The goal is to sharply lower the monthly sums Chinese customers have to pay for brand-new iPhones.

The Alipay service has more than 700 million active users in China.

These latest financing deals are great for cash-strapped buyers who can now borrow money at no cost to purchase Apple products online and pay for the devices in monthly installments over 3, 6, 12 or 24 months. Holders of credit cards issued by three state-owned Chinese banks can also obtain 24-month interest-free financing to purchase Apple gadgets.

Stella Yifan Xie, writing for The Wall Street Journal:

While such loans are interest-free for shoppers and can spur them to make big-ticket purchases, retailers are in effect footing the financing costs. In such arrangements, retailers typically pay lenders an upfront fee that is a small percentage of a product’s price. Consumers then repay the lenders over time.

The minimum purchase to qualify for the 0 percent loan is 4,000 yuan, or about $595. iPhone 8 costs starts at 5,099 yuan on Apple’s China website, which works out to about $758. The new iPhone XR has a starting price of 6,499 yuan, or about $967 vs. its US starting price of $750.

Customers trading in old models can get cheaper installments.

The new financing offers are available through Ant’s Huabei service (Huabei means ‘just spend’ in Chinese). Huabei has informed customers that it could temporarily increase their credit limits to enable them to purchase Apple products. As many as one out of four Chinese aged 30 or younger are using the service, which operates like a virtual credit card.

Apple has a store on Alibaba’s Tmall online marketplace, where Huabei users have been able to get interest-free financing for one year to purchase iPhones and other Apple products. The current 24-month financing offer ends on March 25, Apple told users of Alipay.

It should be noted that the supposed limited-time iPhone XS/XR trade-in offer in China was already extended. Originally, it was scheduled to expire on February 17, but Apple on Valentine’s Day update the website with the new expiration date of March 25. This could indicate that the iPhone XR/XS trade-in deals in other countries might get an extendsion, too.

This is a major initiative on Apple’s part and clearly one of the recent countermeasures that the Cupertino company has employed in order to revive sagging iPhone sales.

Apple’s new zero-interest iPhone financing deal in Australia.

Of course, this is hardly the first time Apple has offered interest-free financing on iPhone purchases. A similar financing deal went live at 42 brick-and-mortar Apple Stores in China last month. A similar program launched in Australia earlier in the month, where shoppers can qualify for an interest-free loan for purchases of Apple products over $1000 AUD.

The iPhone maker also has similar deals in place elsewhere around the world, including a trade-up promo in the United States enticing customers to upgrade to an iPhone XR from $449 or an iPhone XS from $699 if they trade in their iPhone 8 or iPhone 7 Plus.