A year after launch, Apple shuts down Pay Later

Apple is changing course on its buy now, pay later (BNPL) strategy. Just a year after launching its own Apple Pay Later service in the US, the tech giant is shutting it down to focus on partnerships with established lenders.

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Apple Pay Later allowed users to split purchases up to $1,000 into four interest-free payments over six weeks directly within the Apple Pay checkout. However, Apple has opted to pivot towards a broader global offering.

“Later this year,” explains an Apple statement, “users worldwide will be able to access instalment loans through credit cards, debit cards, and lenders when checking out with Apple Pay. With this new approach, Apple Pay Later will no longer be offered in the US.”

This shift emphasizes collaboration. Apple has partnered with financial institutions like ANZ (Australia), HSBC and Monzo (UK), CaixaBank (Spain), and Affirm (US) to offer these instalment options.

Apple Pay Later’s launch initially signalled Apple’s intention to become a more independent player in financial services. It partnered with Goldman Sachs and Mastercard for the program but established its own subsidiary, Apple Financing, to handle loan approvals directly. Apple even conducted its own credit checks, further emphasizing its in-house approach. This strategy potentially positioned Apple to earn transaction fees and maintain control of customer data.

However, Apple’s new direction prioritizes wider accessibility. By partnering with established lenders, they can offer instalment loans on a global scale, potentially reaching a broader user base. This approach may also streamline the loan approval process by leveraging existing credit infrastructure.