Apple Discontinues Apple Pay Later Service After Just One Year

Apple Stock

Apple (NASDAQ:AAPL) has decided to end its buy now, pay later service, Apple Pay Later, barely a year after its U.S. launch. The tech giant will now rely on established industry players like Affirm and Klarna.

This move highlights the challenges Apple faces in building a financial services business from scratch, an endeavor the company has been pursuing for several years.

Launched in March 2023, Apple Pay Later allowed iPhone users to split purchases of up to $1,000 into four equal payments with no fees or interest. It was seen as Apple’s response to the rising popularity of buy now, pay later services and posed a potential threat to companies like Klarna and Affirm.

However, Apple Pay Later was limited to merchants that accepted Apple Pay, whereas competitors had integrated deeply into millions of merchant websites.

At this month’s developer conference, Apple acknowledged the widespread popularity of buy now, pay later services. The company announced that banks would soon be able to offer these plans to their customers through Apple Pay and Apple Wallet. Affirm will be directly integrated into Apple Wallet, allowing customers to open an Affirm account easily.

“With the introduction of this new global installment loan offering, we will no longer offer Apple Pay Later in the U.S.,” Apple announced on Monday. “Our focus remains on providing users with easy, secure, and private payment options through Apple Pay, and this solution will enable us to bring flexible payments to more users worldwide in collaboration with Apple Pay-enabled banks and lenders.”

Despite recent indications that Apple had plans for Apple Pay Later, the company is shifting its strategy by integrating Affirm into Apple Wallet.

Apple Pay Later was unique because it required Apple to create its own bank to offer the loans, unlike the Apple Card, which is issued by Goldman Sachs.

While no new Apple Pay Later loans will be issued, customers with existing loans can still manage them through Apple Pay.

Featured Image: Megapixl

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About the author: Stephanie Bédard-Châteauneuf has over four years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on consumer stocks, cannabis stocks, tech stocks, and personal finance. She has an MBA in finance.