Apple Shuts Down Apple Pay Later

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Apple has discontinued a popular feature just one year after its launch, disappointing many iPhone users.

The tech giant has pulled its ‘buy now, pay later’ service, known as Apple Pay Later, which allowed users to take out loans for purchases up to $1,000 and pay off the amount in four installments over six weeks.

Although the option is no longer available for new users, those with existing loans will not be affected.

Apple’s decision to cancel Apple Pay Later comes as it plans to introduce a similar program in the fall. This new program will allow users to access loans provided by eligible credit and debit card companies.

Launched with much fanfare in March 2023, Apple Pay Later was the company’s response to the global popularity of buy now, pay later services, posing a significant challenge to companies like Klarna and Affirm. However, Apple’s feature was limited to places where its digital payment service was accepted, unlike other buy now, pay later services that had integrated into millions of merchant websites.

“With the introduction of this new global installment loan offering, we will no longer offer Apple Pay Later in the U.S.,” Apple announced late Monday. “Our focus continues to be on providing our users with easy, secure, and private payment options with Apple Pay. This solution will enable us to bring flexible payments to more users, in more places across the globe, in collaboration with Apple Pay-enabled banks and lenders.”

As a result, Apple has stopped offering new Apple Pay Later loans.

Starting later this year, users worldwide will be able to access installment loans offered through credit and debit cards, as well as lenders, when checking out with Apple Pay. Instead of acting as a lender itself, Apple will help users secure loan options through partnerships with banks and lenders enabled by Apple Pay.

This option will be available in the U.S. with the Discover credit card and retail loan lenders Synchrony Financial and Fiserv Solutions, which can be accessed directly through Apple Pay. The new feature will also allow users to apply for loans with Affirm, a buy now, pay later lender that offers short-term loans for online and in-store purchases.

Users will be able to add the loan option during checkout, allowing them to apply for loans through credit card services, loan services, or directly through Affirm. The new loan feature will still omit hidden fees, offer zero percent interest, and allow users to split payments into four installments over six weeks.

According to a June survey by LendingTree, about 13 percent of 889 respondents said they had used Apple’s buy now, pay later feature, while one in three Americans said they have considered applying for an installment loan.

Starting in the fall, users in Australia, Spain, and the UK, who previously did not have access to Apple’s buy now, pay later feature, will also have access to installment options.

Apple initially rolled out ‘early access’ to the feature in March 2023, issuing the loans itself, but the service did not officially launch until October.

The partnership with former competitor Affirm could help Apple expand its loan program to offer longer-term installment options, according to JPMorgan analyst Reginald Smith. “Affirm does not expect a meaningful impact on FY25 revenue… but it is hard to imagine adding a platform of this magnitude doesn’t move the needle,” Smith wrote last week, according to the Financial Times.

The shift to partner with Affirm and other credit and debit card companies to replace the buy now, pay later option was introduced at the Worldwide Developers Conference in California last week.

This news has been read 944 times!

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