One of the most anticipated features of iOS 16 by payments enthusiasts was Apple Pay Later. The product was to be Apple’s foray into the popular Buy Now, Pay Later (BNPL) space and would allow Apple Pay transactions to be divided into a pay-in-four installment plan over six weeks. The service intends to run on the Mastercard network and requires no further integration for merchants beyond Apple Pay acceptance—now reportedly 90% of U.S. retailers.
Apple announced the new feature at WWDC in June, and we expected the release of the Apple Pay Later service to coincide with the Sept. 12 release of iOS 16, but it was notably absent from the event. Bloomberg’s Mark Gurman reports there may be trouble: “I’m hearing there have been fairly significant technical and engineering challenges in rolling out the service, leading to the delays.” Gurman believes these delays may push the release date back to Spring 2023.
It’s certainly an interesting time to be releasing a BNPL product. The CFPB recently released the results of its inquiry into BNPL lending and plans to, “…identify potential interpretive guidance or rules to issue” and subject BNPL lenders to regulatory examinations “…just like credit card companies.”
Given the regulatory changes, and potential technical issues, Apple may want to take their time to release the new feature. Of course, we will wait and see what Apple has in store for us next.
Overview by Ben Danner, Research Analyst at Mercator Advisory Group.