Apple has announced the discontinuation of its buy now, pay later service, Apple Pay Later, just a year after its launch in the U.S. The tech giant will now rely on established industry players like Affirm and Klarna for such services. This move reflects the challenges and fierce competition involved in building a financial services business from the ground up.
Apple Pay Later was introduced in March 2023 to allow iPhone users to split purchases of up to $1,000 into four equal payments with no fees or interest. While it aimed to compete with the growing popularity of buy now, pay later services globally, it was limited to locations where Apple Pay was accepted, unlike its competitors which had broader merchant integration.
Recognizing the widespread adoption of buy now, pay later services, Apple recently announced at its developer's conference plans to enable banks to offer such plans through Apple Pay and Apple Wallet. Affirm will be directly integrated into Apple Wallet, allowing Apple customers to open an Affirm account seamlessly.
Apple stated, “With the introduction of this new global installment loan offering, we will no longer offer Apple Pay Later in the U.S.” The company aims to provide users with secure and flexible payment options through collaborations with Apple Pay-enabled banks and lenders.
Despite previous indications of continuing Apple Pay Later, the company has ceased offering new loans under the service. Existing Apple Pay Later customers will still be able to manage their loans within Apple Pay.
Apple's unique approach with Apple Pay Later required the creation of its own bank to provide loans, with the Apple Card being issued by Goldman Sachs. While Apple Pay Later may be ending, the company remains committed to offering convenient and secure payment solutions through Apple Pay, expanding flexible payment options to a wider global audience.
