Apple is discontinuing its buy now, pay later service, Apple Pay Later, launched in the US in October 2023. This service allowed users to spread payments over four instalments within six weeks. Apple will now focus on offering instalment loans through various credit and debit cards and direct lenders during checkout with Apple Pay, starting later this year. This new approach aims to provide broader availability of instalment plans via financial intermediaries worldwide, compared to the U.S.-exclusive Apple Pay Later.
Apple emphasized that users with active loans would retain access to Apple Pay Later for managing their payments. The company is committed to secure and private transactions, reinforcing this in their announcement.
Initially launched in March 2023, Apple Pay Later allowed customers to divide purchases into four interest-free payments for amounts up to $1,000. Despite this innovation, competitors like Klarna and Affirm led in convenience and accessibility, being integrated across numerous websites. Apple Pay Later was limited to vendors accepting Apple Pay, restricting its reach. Apple partnered with Goldman Sachs to manage the provision of loans, with the bank determining eligibility and credit limits for borrowers.
Despite these constraints, Apple Pay Later promised enhanced financial flexibility for Apple Pay users, offering a novel way to manage large purchases. This development marked a significant step in Apple’s financial services, reflecting the company’s ambition to streamline the payment experience.
Apple Pay has seen significant growth since its introduction, becoming the preferred in-store payment option over PayPal. By the first quarter of 2023, Apple Pay briefly outpaced PayPal as the top digital wallet choice. By the second quarter of 2024, 12% of shoppers used digital wallets for retail transactions, with Apple Pay accounting for half of those users, solidifying its lead over competitors like PayPal and Google Pay. This trend indicates a broader shift towards digital payment solutions.