Apple is discontinuing its Buy Now, Pay Later (BNPL) service just a year after its launch, shifting its focus toward collaborating with third-party providers for installment loans.
Introduced in the U.S. last year, Apple Pay Later allowed online shoppers to apply for loans of up to $1,000 during the Apple Pay checkout process, enabling them to divide purchases into four equal payments over six weeks without any fees or interest.
However, earlier this month, Apple announced a new strategy for global installment loans through both debit and credit cards, as well as in partnership with the BNPL leader Affirm. According to an Apple statement, “Starting later this year, users globally will have access to installment loans offered through credit and debit cards and lenders when checking out with Apple Pay. With this new global installment loan service, Apple Pay Later will no longer be available in the U.S. Our goal remains to provide users with seamless, secure, and private payment options through Apple Pay, enabling more flexible payment solutions for a wider audience around the world, in collaboration with banks and lenders.”
Apple’s new installment service will involve partnerships with various financial institutions, including ANZ in Australia, HSBC and Monzo in the UK, CaixaBank in Spain, as well as Citi Synchrony, Affirm, and issuers with Fiserv in the U.S.
When it launched, Apple Pay Later was seen as a significant step for the tech giant to reduce its reliance on partners within the financial services sector. Although Apple collaborated with Goldman Sachs and Mastercard for the service, it also established a wholly-owned subsidiary, Apple Financing, to provide loans directly. Additionally, Apple managed credit checks internally, and earlier in the year, it acquired the UK credit bureau Credit Kudos, which utilizes open banking technology for precise credit scoring. This internal approach allowed Apple to earn interchange fees from transactions while also protecting customer data from third-party access.