Apple is stopping its Buy Now, Pay Later (BNPL) service Apple Pay Later after only one year since its launch.
By dropping Apple Pay Later, the tech giant is opting to install new loan services offered via third-party credit and debit cards through the “introduction of this new global instalment loan offering” in partnership with BNPL provider Affirm.
Having only been initially offered to Apple Pay customers in the US, Apple Pay Later will stop open loans on Monday. Users who still have loans to pay off in instalments will be allowed to pay them off in their allocated time but not be offered new loans once it has been paid off.
However, this does not signal Apple’s departure from the BNPL space. Apple will be working alongside Affirm to embed its instalment-based payment services to Apple Pay by integrating it into new financial services and markets.
Apple will launch its instalment loan payment feature in the UK with HSBC and Monzo, whilst in the US, the service will first become available for Citi and Synchrony users as well as lenders for Fiserv.
An Apple statement read: “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.”
Launched in March 2023 in the US, Apple Pay Later was brought in to be a competitor to the likes of Klarna, Afterpay and more as the BNPL sector surged in popularity in 2020 and 2021.
Interest free instalment-based payment methods rose significantly in those years due to COVID-19 hampering consumers’ funds, which was only fuelled more when the global economy took a nosedive in 2022, particularly in the UK due to the cost-of-living crisis.
Despite BNPL’s prominence as a new and emerging payment method, there have been calls to regulate the space in the wake of concerns regarding consumer wealthfare when it pertains to opting into monthly instalment-based loans that some consumers can not afford to pay back.
In a bid to stop consumers’ reliance on BNPL, Klarna introduced a late payment charge to any missed payments. The Swedish company has also been pushing to get regulatory discussions in the UK back on track after they were halted last year.
Now with Apple introducing its new loan system with Affirm in the UK later this year, regulation talks may resume as Apple has a considerable user base in the UK with Apple Pay being one of the most popular payment methods in the country.
