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Apple shuts down Apple Pay Later

Apple shuts down Apple Pay Later

Apple is killing off its buy now, pay later service just a year after launch as it switches its focus to working with third parties for instalment loans.

Launched in the US last year, Apple Pay Later let online shoppers apply for loans of up to $1000 during the Apple Pay checkout and split the purchase into four equal payments across six weeks, with no fees or interest.

However, earlier this month the company outlined plans for a global instalment loan offering through debit and credit cards as well as BNPL giant Affirm.

Says an Apple statement: "Starting later this year, users across the globe will be able to access instalment loans offered through credit and debit cards, as well as lenders, when checking out with Apple Pay.

"With the introduction of this new global instalment loan offering, we will no longer offer Apple Pay Later in the US. Our focus continues to be on providing our users with access to easy, secure and private payment options with Apple Pay, and 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."

For the new instalment service, Apple has partnered with ANZ in Australia, HSBC and Monzo in the UK, CaixaBank in Spain and Citi Synchrony, Affirm and issuers with Fiserv in the US.

Apple Pay Later was seen at launch as sign that the tech giant was moving away from its reliance on partners for its growing FS business. While Apple worked with Goldman Sachs and Mastercard on the service, it set up a wholly-owned subsidiary, Apple Financing, to offer loans directly.

Apple also handled credit checks for the service inhouse. Earlier this year, it acquired UK credit bureau Credit Kudos, which uses open banking technology to deliver finely-tuned credit scores. By taking the process inhouse, Apple could earn interchange fees from transactions and also avoid the need to share customer data with third parties.

Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 18 June, 2024, 11:561 like 1 like

Back in the day, Fintech Mafia used to threaten banks by saying Apple will get into financial services and make them extinct. That threat hasn't aged well! 

On a side note, the larger a company is, the more things you'd expect it to do inhouse. In fact, in emerging markets, the only way for a company to become large is to do more things inhouse even if they belong to diverse industries aka conglomerate.

But Apple defies this wisdom: Many parts of iPhone are bought outs; manufacturing of all its products is done by the Foxtrons of the world; Apple Card was from Goldman Sachs; AI is from OpenAI; now Apple Pay Later BNPL is from Affirm. 

Safe to say that the world's #1 (okay, #2 or #3 depending on how $AAPL does on the given trading day) is slowly turning into a design, branding cum sales company.

A Finextra member
A Finextra member 18 June, 2024, 14:34Be the first to give this comment the thumbs up 0 likes

Well............... banks have never done particularly well as suppliers of Computer or mobile telephones,  Apple have done a good job of technical brokerage between merchants and card issuers but when it comes to the provision of complex consumer credit -its not a great surprise to see them fail to achieve success.  Sometimes you need more than a great brand and a potential market!