Apple will reportedly experiment with the "buy now, pay later" economy when it launches an "Upgrade" program that allows for device leasing. However, in some bad news for consumers, those leased devices could be subject to strict limitations if payments are skipped.

According to 9to5Mac, Apple is working on a new system that allows its financing partners to place leased iPhones in Restricted Mode if customers fall behind on payments. Restricted Mode disables all iPhone apps and services other than essential apps like the App Store, Health, Phone, Messages, Clock, Settings, Wallet, and Passwords.

The mode also displays a message asking customers to solve payment or contract-related issues to regain complete access.

At the center of this process is the financing partner’s app, which determines how many missed payments trigger a device lock and which apps or services are exempt from it.

To make the process easier for financiers, Apple will roll out a new system called App Managed Features. Finance partners can enroll iPhones in the program and continuously monitor device status to ensure the contract is in good standing, 9to5Mac says.

Apple will reportedly also introduce a new activation lock called the Partner Finance Lock. It is intended to prevent users from reselling leased devices when payments are overdue and will rely on Find My features.

According to Bloomberg, the program is set to launch on July 28 in partnership with Klarna. It will reportedly allow customers to lease iPhones and Apple Watches for 24 months, and Macs and iPads for 36 months.