Apple announced on Monday that it will no longer be offering loans through its buy-now, pay-later service, Apple Pay Later, which debuted a year ago.
This decision follows Apple’s announcement that it will begin accepting installment loans through third-party companies like Affirm and credit and debit cards from issuers like Citigroup later this year in its Apple Pay checkout process.
Apple said that it will no longer offer Apple Pay Later loans, which allowed users to purchase items online for up to $1,000 and pay for them over the course of four interest-free installments. The cancellation shows that not every new fintech offering or feature that Apple introduces is profitable or aligned with the company’s overarching business plan.
Global Expansion of Installment Loan Options Through Apple Pay Redefines Checkout Financing Landscape
“Users worldwide will have access to installment loans provided by credit and debit cards, as well as lenders, when checking out with Apple Pay, starting later this year stated by an Apple representative. Apple Pay Later will no longer be available in the United States with the launch of this new global installment loan offering.
As opposed to Apple Pay Later, which was exclusively offered in the United States, users who want installment plans at checkout would be able to obtain them through other financial intermediaries in more countries worldwide, according to Apple.
Apple stated that enabling safe and private payments was the top objective for Apple Pay, the moniker given to its contactless and online payment software. According to Apple, customers who have open loans can still use Apple Pay Later’s tools to monitor and pay off their debt.
Users could apply for loans through the iPhone Wallet app before Apple Pay Later was withdrawn. If their application was granted, they would see a “Pay Later” option when they checked out online.
Notably, compared to some of its previous products, such as Apple Card, the approach required Apple taking over a larger portion of the financial backend. Instead of handling all loan decisions and credit checks through financial partners, Apple made some of its own decisions for the program. A fully owned subsidiary of Apple issued the loans.
