In an attempt to increase iPhone sales in China, Apple has teamed up with Alipay to give potential buyers a more affordable avenue to buy the phones, according to a report in The Wall Street Journal.
Apple is offering up to two years of interest-free financing and a monthly payment option of 24 months. To qualify, customers have to meet the minimum purchase requirement of $595.
In China, an iPhone 8 costs about $758 and the new iPhone XR costs about $967. Apple has blamed disappointing revenue on falling sales of iPhones in China, and also hinted at a slowing economy there. Shipments of phones in the country fell 20 percent the most recent quarter, from a year earlier.
The move will significantly decrease the monthly charges people have to pay for iPhones in the country, and Apple has offered a similar deal at its 42 Apple stores.
Retailers in China are essentially fronting the costs of the financing, as retailers pay lenders a fee upfront, which is a small percentage of the price of the product. The consumer will then repay the lender over a period of time.
Apple has worked out a deal where credit card holders in the country can also get 24-month interest-free financing, but credit card usage in the country is low. Most Chinese consumers prefer to link their bank accounts directly to either Alipay or WeChat Pay and use their phones to make purchases.
Alipay has upwards of 700 million users in the country, and its Huabei service, which people use as a sort of virtual credit card, also has a very high penetration of usage.
In addition to the new financing deals, Apple has also discounted some of its new iPhones for people who trade in older ones. For example, an XR or XS could be discounted about 2,000 yuan, which is almost $300.