Apple is discontinuing its ‘Buy Now, Pay Later’ (BNPL) service, Apple Pay Later, just a year after its launch as the company shifts its focus towards collaborating with third parties for instalment loan offerings.
Introduced in the United States last year, Apple Pay Later allowed online shoppers to apply for loans up to $1,000 at the Apple Pay checkout, splitting the purchase into four equal payments over six weeks without any fees or interest. However, the company recently announced plans for a global installment loan service through debit and credit cards, in partnership with BNPL giant Affirm.
In a statement, Apple confirmed, “Starting later this year, users across the globe will be able to access installment 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 its new installment 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.
All-round effort
The launch of Apple Pay Later was initially perceived as a move away from Apple’s reliance on partners for its financial services business. While Apple collaborated with Goldman Sachs and Mastercard on the service, it also established a wholly-owned subsidiary, Apple Financing, to offer loans directly. Apple handled credit checks in-house and earlier this year acquired UK credit bureau Credit Kudos, which uses open banking technology to provide finely-tuned credit scores. This in-house process allowed Apple to earn interchange fees from transactions and avoid sharing customer data with third parties.
Despite these efforts, Apple has now decided to pivot back to working with third-party lenders and banks for its instalment loan services, aiming to provide more flexible payment options to a broader audience globally.
