Apple’s Pay Later feature, which allowed users to take out interest-free loans to pay for purchases in installments, is being shut down less than a year after its launch in the US. The service, offered in collaboration with Mastercard and Goldman Sachs, will be replaced by a new feature in the upcoming iOS 18 that will allow third-party buy now, pay later companies such as Affirm to offer similar services. Existing Pay Later loans can still be paid off and tracked in Apple Wallet. Apple has only shared payment information with Experian and plans to offer loans through credit cards, debit cards, and lenders when customers use Apple Pay.
Apple announced that it will collaborate with banks and lenders to bring flexible payment options to more users through Apple Pay. In the US, Citigroup, Synchrony Financial, and Apple Pay issuers using Finserv software will be able to issue buy now, pay later loans through Apple Pay. The company emphasizes its commitment to providing users with easy, secure, and private payment options while expanding the availability of flexible payments through its platform. The change is expected to take place later this year with the release of iOS 18 in September.
The decision to discontinue the Pay Later feature comes just two years after its introduction, raising questions about the reasons behind its early closure. While Apple did not provide a specific reason for shutting down the service, the move may be part of a strategic shift towards partnering with third-party financial institutions to offer buy now, pay later options. This shift could signal a broader effort by Apple to expand its financial services offerings and collaborate with a wider range of lenders and banks to provide payment solutions through Apple Pay.
The closure of the Pay Later feature also comes amid a growing trend in the financial industry towards embracing buy now, pay later services. These services have gained popularity among consumers seeking alternative payment options that offer more flexibility and convenience. By integrating third-party buy now, pay later companies into its platform, Apple aims to meet the evolving needs of its users and provide a seamless payment experience that aligns with current consumer preferences. The move may also reflect Apple’s strategic focus on partnering with established players in the financial sector to enhance its payment offerings.
As Apple prepares to roll out the new buy now, pay later feature in iOS 18, it remains to be seen how users will respond to the change and what impact it will have on the overall payments landscape. The company’s collaboration with major financial institutions and lenders to offer flexible payment options through Apple Pay could potentially reshape the way consumers make purchases and manage their finances. With the increasing popularity of buy now, pay later services, Apple’s decision to pivot towards partnering with third-party providers highlights the importance of adapting to changing market dynamics and meeting the evolving needs of its user base. By leveraging its platform to facilitate seamless payment experiences, Apple aims to enhance its position in the competitive financial services industry and continue to drive innovation in the payments space.
