By / Aug 3

Apple has recently announced that it will include “apple pay later” in Apple Pay when it releases ios 16 this fall. “Apple pay later” is part of a growing trend among companies to offer buy now, pay later payment options. Analysts estimate that at least $100 billion in transactions annually are paid with buy now, pay later, and this amount is predicted to dramatically increase within a few years, with some analysts predicting that this amount could reach between $1 trillion and $4 trillion within a few years. Because buy now, pay later is such a widespread phenomenon, it is important for Christians to be aware of its effects on low-income individuals. 

What is buy now, pay later? 

Buy now, pay later allows consumers to purchase products and pay for them in installments over time. Consumers often pay for items in four installments over several months, rather than paying for items all at once. Buy now, pay later is, essentially, a short-term loan that allows people to purchase items they may not be able to afford if they had to pay for them all at the time of purchase. Buy now, pay later does not cost more than traditional payment methods if consumers make their payments on time. These “loans” can be used to purchase necessities, household items, and technology, among other items. 

However, while credit card companies check credit scores prior to issuing loans, buy now, pay later does not. Thus, these programs are particularly attractive to people who have a low credit score or who do not have a bank account, which are more common among low-income individuals. Studies show that a large percentage of users are young people, who may not have a full understanding of debt and who tend to have lower incomes. 

Why are buy now, pay later programs predatory toward the poor?

Buy now, pay later programs encourage people to spend more money than they otherwise would. A 2020 survey by Cardify.ai, a data firm that tracks consumer spending, found that nearly half of buy now, pay later shoppers increased their spending by 10% to over 40% when they used buy now, pay later instead of a credit card. Another survey of 6,500 adults found that around half of people who use buy now, pay later worry it will lead them to overspend, and 57% of people who have used the program have regretted purchasing an item because it was too expensive. This is particularly troubling in light of the fact that a disproportionate number of low-income individuals use this method of payment. 

While buy now, pay later does not cost more than traditional payment methods up front, it often charges high interest rates and steep fees for people who are late on payments. Unlike credit cards, buy now, pay later is not heavily regulated by the government. Consequently, it is not required to clearly state late fee policies and is not prohibited from issuing interest rates above a certain amount. These exorbitant fees and high interest rates can trap low-income individuals in a cycle of debt. 

Evidence also suggests that people are likely to be late on buy now, pay later payments. A study by CR Research, a market research agency, found that over half of buy now, pay later consumers have fallen behind on a payment. Additionally, a 2020 study by Cornerstone Advisors found that two thirds of consumers who were late for a payment lost track of payments and paid late, despite having the needed money. This high rate of late payments is due in part to the complexity of the service and difficulty of keeping track of required payments. It also points to the reality that many low-income individuals may be forced to take on more debt to make these payments and that these programs are targeted toward young people who disproportionately overdraft. 

Consequently, buy now, pay later is predatory toward the poor because it disproportionately attracts low-income individuals, often involves very steep late fees that are not clearly advertised, and can make keeping track of payments difficult. It can trap low-income individuals in cycles of debt. 

Can buy now, pay later programs be helpful?

If people make careful and informed decisions about when to use buy now, pay later, it could serve as a helpful budgeting tool for those with limited resources. People may be able to purchase items that they wouldn’t otherwise be able to afford. And if buy now, pay later programs reduced their interest rates for late fees and more clearly advertised their late policies, they could be beneficial to low-income individuals. Regulations to ensure that these criteria are met would reduce the risks associated with these programs.

Why should Christians care about this issue? 

Christians should care about the rise in popularity of buy now, pay later programs because Scripture is clear that we are called to seek justice and care for the poor. “And what does the Lord require of you but to do justice, and to love kindness, and to walk humbly with your God?” (Micah 6:8). High interest rates on these loans are unjust and harmful to the poor, so supporting reasonable regulations on their excesses is a way to promote justice in our society. Additionally, Christians are called to love our neighbors. Opposing predatory lending practices is one way that Christians can live out this call to love. 

Scripture strongly condemns usurious and exploitative lending practices. Recognizing the dignity of every person extends to business and financial relationships as well as interpersonal ones. As the Southern Baptist Convention affirms, “God is opposed to those who take advantage of the weak, poor, and vulnerable” and “predatory lending fails to respect the dignity of the person created in the image of God and interferes with human flourishing.” For this reason, Southern Baptists are opposed to predatory lending practices that target financially unstable persons. Any lending practice that intentionally uses and exposes vulnerable individuals is unacceptable and should be strictly regulated by government protections. By being aware of the pitfalls of buy now, pay later, Christians can support policies that are beneficial to their neighbors and more effectively advocate for the poor. 

The ERLC is committed to strongly opposing exploitative lending practices and is working to support regulations and legislation that would stop these practices that are harmful to our neighbors.

Sources:

By / Mar 22

Apple CEO Tim Cook’s letter about the FBI brought forth both emotional outrage and joyful fist-pumping from the tech community. It also has brought a very public spotlight to a conflict between two great problems that plague the modern era: security against threats and the safety of our personal data. The implications of this public debate for cybersecurity, law enforcement, case law, and digital privacy are worth considering.

But if you’re just tuning in, here are the basics, the debate so far, and what is ahead. There are a lot of interlocking pieces so it’s OK if you’re just getting a handle on this issue.

In December 2015, Syed Rizwan Farook and Tashfeen Malik murdered 14 people at a party at the Inland Regional Center in San Bernardino, California. It is now known they had ties to jihadi groups and this was the deadliest terrorist attack on American soil since 9/11. Farook was an employee of the San Bernardino County health department and was issued a work phone, an iPhone 5C running iOS 9 operating system software. Farook and his wife-accomplice destroyed their personal phones on which presumably they did much of the coordinating for these attacks. Farook’s work phone, the phone in question, has been in law enforcement possession since Farook’s death.

However, Farook’s iPhone is locked by the famous iPhone passcode screen. (iPhone 5Cs do not have fingerprint security). Furthermore, Farook may have enabled a feature that would scramble the phone’s information should multiple incorrect passcode guesses be made. This proves a nearly insurmountable obstacle for the FBI. Given these circumstances, the FBI considered the best course of action was to request that Apple help bypass this security feature by creating special software to disable the passcode and scrambling feature. So, on February 16 a federal judge in Riverside, California, mandated through a court order that Apple help the FBI by essentially two means: 1) bypassing or disabling the auto-erase function and 2) enable the FBI to guess the password however it wants, as quickly as it wants.

The authority that law enforcement is relying on is the All Writs Act, federal statute the government has historically used to compel cooperation in law enforcement activities.The FBI says it wants Apple to create this workaround software for only this one deceased terrorist’s iPhone and offered Apple to have complete control of the phone, the software, everything. They just want the data on the physical phone in the chance there’s any additional evidence in this case.

Before Tim Cook’s public letter, Apple complied with law enforcement’s initial request for information from the iPhone 5C by handing over its iCloud records. However, since the iCloud records only went up to October 19, 2015, this left an obvious gap in time. Adding to the complexity, in a March 10 filing the government said there is evidence that the auto backup feature for iCloud may have been disabled  somewhere between October 19 and his death on December 2. The FBI, desiring to do its due diligence, thinks additional information could be located on the phone but they can’t get into it because of the aforementioned combination of passcode lock and potential information scramble if the passcode is entered incorrectly. And that’s if that feature is even enabled. The FBI would rather not try their luck.

Apple built this security feature into its operating software since iOS 8 was released in September 2014. If this were any earlier version of the iPhone software, then, from a technical perspective at least, the FBI wouldn’t be facing this issue in quite the same way. With a simple password and no auto-scramble feature, the FBI could “brute force” its way into the phone by hooking it up to a more powerful computer and running all the 4-digit password combinations (10,000 by the way) until it guessed the right one. But with iOS 9, the operating system on Farook’s iPhone, a user can set a 4-digit, 6-digit or alphanumeric passcode. This makes guessing the correct password from a few hours to 5.5 years.

A quick aside: A brute force hack is just guessing passwords until the correct one is discovered. This is why websites encourage you to have passwords more complex than 1234 or 1122. Those are easy to brute force. With those passcodes or similarly simple ones, a thief could break into your account just sitting on the couch letting a computer do all the work in a matter of minutes depending on computing power.

Some other important events have also occurred since this very public debate burst on the scene February 16. For a full timeline of events, here is a good report from USA Today. On February 29, a New York magistrate ruled that the FBI could not use the All Writs Act to ask Apple to unlock an iPhone 5S running iOS 7 that is evidence in a drug case. While this case is completely unrelated–the request, circumstances, and software are different–it is significant in that the judge’s ruling said the All Writs Act was not sufficient to compel Apple’s cooperation.

The legal back and forth on this case has been very public. Apple, a New York District Attorney, and the FBI appeared before the House Judiciary Committee on March 1 to present their sides of the case. There has also been an appeal from Apple, a Justice Department response, and a response from Apple. On March 22, the Justice Department and Apple will present their cases in a public hearing in Riverside, California. No matter the outcome for either side, this case could proceed all the way to the Supreme Court.

From a cybersecurity standpoint there are a couple key factors to keep in mind:

First, digital information resists containment. Say Apple complies and creates software to bypass its security measures. This will require a team of 6-10 engineers to develop this software. Software is inherently different than a physical good in that it could be copied or distributed infinitely with no discernible effect on the end product. Of course Apple and FBI employees can and should be trusted, but human nature being what it is does not guarantee the software will not get out. In cybersecurity, human error or malfeasance is the number one weakness. An institution can set up all the right protections from outside attack, but as we saw in 2013 with Edward Snowden, it just takes one person on the inside to release the information to the world.

Second, insecurity for one means security for none. In the realm of electronic information, creating software to bypass a security feature essentially nullifies that security feature for everyone. Back doors to encryption (encryption being a feature that makes information unreadable and nearly unguessable without a key) means that very encryption is now worthless because someone out there can get into it. This means this is not merely a domestic issue but an international one since Apple operates around the globe. Internationally there are likely hundreds, if not thousands, of locked iPhones possessed by governments both well-meaning and not-so-well-meaning. Were Apple to comply, this would bring other countries to Apple’s door with requests for the software to bypass the security. What the United States does, the land of the free with those pesky first ten amendments to protect civil liberties and human rights, draws attention and emulation from other governments.

Finally, how should a Christian consider this issue? In Matthew 10:6, Jesus told his followers to be “as wise as serpents yet as harmless as doves." When considering this issue we must take into account not just the terrible tragedy and families affected by the December attack, but also the further ramifications of security in this information age. This is not an isolated case free of international or future ramifications. Lives everywhere, including those of persecuted Christians who use iPhones and other encryption serves to protect their missions, may be at risk now and in the future without strong information security. It as an issue for all the Church to consider prayerfully and carefully.

Update:  In a very surprising move, yesterday afternoon the FBI requested the much anticipated March 22 hearing be canceled because an "outside party" has provided a possible way of unlocking Farook's iPhone without the need for Apple's help. Although this particular case could possibly be resolved if this "outside party" is successful — the FBI will provide a status update to the court by April 5 — certainly the broader debate will continue as law enforcement and technology are increasingly intertwined.