After just one year since its launch, Apple has made the strategic decision to discontinue its in-house buy now, pay later scheme in the United States. Instead, the technology giant will now be providing payment plans through third-party credit and debit card lenders, marking a significant shift away from traditional financial services.
Customers who are currently enrolled in the Pay Later scheme will still have the option to manage their payments through Apple’s Wallet app. The company’s move away from the scheme reflects a departure from its initial plans to offer direct financial services. Previously, Apple Pay Later allowed users in the US to split the cost of purchases amounting to $1,000 (£788) into four instalments over six weeks without incurring interest or fees.
The decision to terminate the scheme comes amid a backdrop of increasing interest rates in the US, driven by efforts to combat rising inflation. When the scheme was introduced, the low interest rates in the US at the time made borrowing an attractive option for consumers. However, as interest rates started to rise, the appeal of such plans obviously diminished.
During Apple’s annual developer event, the company stated that it would be forging partnerships with banks such as Citi in the US, HSBC in the UK, and ANZ in Australia to offer alternative instalment payment options. These new payment alternatives are anticipated to be integrated into the upcoming iOS 18 operating system, set to be released later this year.
The discontinuation of Apple Pay Later in the US indicates a significant change in direction for the technology giant. By transitioning away from directly providing financial services and instead partnering with established lenders, Apple is clearly adapting to the changing landscape of consumer lending and finance.
Overall, Apple’s decision to end its Pay Later scheme reflects a strategic shift in its approach to consumer finance in the US market. It will be interesting to see how the company’s new payment plans through third-party lenders will be received by consumers, and the impact it will have on the broader buy now, pay later industry. As the landscape of consumer finance continues to evolve, the decision by Apple to discontinue its in-house lending scheme represents a notable development in the ongoing evolution of financial services in the United States.