Apple Pay Later is being discontinued in favor of a new installment loan system

Apple is discontinuing its buy now, pay later service, Apple Pay Later, less than a year after its full launch in the United States, the company confirmed to 9to5Mac.

Apple Pay Later was first announced in conjunction with iOS 16, though it wasn’t included in the initial release. The service began with early access invitations to “randomly selected users” in March 2023 before its wide release in October. The decision to discontinue it less than a year later marks a quick pivot in Apple’s approach to consumer finance.

Apple Pay Later allowed users to take out “pay later” loans, repayable in four installments over six weeks. In its place, Apple will enable users to apply for installment loans through credit cards, debit cards, and various lenders at checkout when using Apple Pay. This change is set to roll out later this year and will be available to users globally.

The shutdown of Apple Pay Later is expected to directly affect users who rely on the service to manage their payments. However, Apple aims to soften the impact by providing installment loan options. This new solution will enable users to access flexible payment options through their existing credit and debit cards.

Apple’s strategic shift from a standalone buy now, pay later service to integrate installment loans with existing financial systems marks a significant change in its market approach. By leveraging the infrastructure of credit and debit cards, Apple aims to offer a more streamlined and widely accepted payment option.

The introduction of global installment loans signifies Apple’s intention to expand its payment services internationally. This move aligns with Apple’s broader strategy to enhance its presence in the global financial market, providing users with flexible payment options worldwide.

In the US, Apple Pay Later faced competition from services like Afterpay and Klarna. With the shift to installment loans, Apple aims to diverge, integrating more deeply with traditional banking systems.

Initial user reactions to the discontinuation of Apple Pay Later and the introduction of installment loans are mixed.

Apple’s new installment loan system will involve partnerships with various financial institutions. These collaborations are expected to influence the payment industry by offering a more integrated and potentially more secure payment solution.

The discontinuation of Apple Pay Later and the introduction of installment loans could signal future developments in Apple’s financial services. This shift might pave the way for more integrated and comprehensive financial solutions within the Apple ecosystem.

With these changes, Apple aims to enhance the flexibility and accessibility of its payment options through Apple Pay, collaborating with a broader range of financial institutions worldwide.

The company’s focus remains on providing secure and private payment solutions to its users, ensuring a smooth transition and expanding capabilities in the global market.