Apple will no longer offer Apple Pay Later, its buy now, pay later service launched last fall, which allowed Apple Pay users to split transactions of $1,000 or less into four interest-free payments.
The announcement follows news that Apple will integrate BNPL programs from Affirm and others into Apple Pay in its upcoming fall iOS update. The tech giant made this move away partly due to Apple Pay Later’s limited scope; the BNPL service was only available to U.S. users.
Like a Credit Card
It’s not immediately clear if Apple shut down its BNPL operations because of recent actions by the Consumer Financial Protection Bureau. The CFPB recently issued an interpretive rule stating that BNPL services should be regulated like credit cards. This means providers must issue monthly statements, disclose fees, and handle disputes like a credit card company.
Another reason Apple likely moved away from BNPL is the company was handling all of Apple Pay Later’s financial operations in-house. It was conducting credit checks and loan decisions through a wholly-owned subsidiary.
Ceding Ground
Apple Pay Later put Apple in direct competition with BNPL-first companies like Klarna and Affirm, which offer a much wider array of loans. Apple’s shift away from BNPL is one of the rare times the company has ceded ground in its fintech aspirations.
In its upcoming update, in addition to leveraging BNPL plans from other providers, Apple will also integrate Google Chrome and Windows support into Apple Pay to expand its customer base beyond iPhone users.
Though the issuance of new Apple Pay Later loans will be discontinued immediately, users with open loans will still have access to the program until their loans are paid off.
