Key Points
- Discontinuation of Apple Pay Later: Apple shuts down its buy now, pay later service just months after launch.
- New Instalment Loans: Apple to introduce a global instalment loan service via credit and debit cards.
- Bank Partnerships: The new service will partner with banks like ANZ, CaixaBank, HSBC, and Citi for broader reach.
- Managing Existing Loans: Current Apple Pay Later loans can still be managed through the Apple Wallet app.
- Strategic Shift: Apple shifts focus to collaborations with financial institutions, simplifying its approach to offering flexible payment options.
Apple Discontinues Apple Pay Later
Apple has made the decision to discontinue its buy now, pay later service, Apple Pay Later, just months after its official launch. Initially introduced to select users in March 2023, the service was rolled out more broadly in the United States by October of the same year. Apple Pay Later allowed users to divide the cost of purchases into four instalments over six weeks without incurring interest or fees. However, the tech giant is now shifting its strategy and phasing out this service.
A Shift in Strategy
Apple Pay Later was a bold step for the company, moving into the financial services sector with its own lending model. The service was designed to provide Apple customers with a convenient way to manage their payments for purchases up to $1,000 (£788). It was an attractive proposition when interest rates were low, making borrowing more appealing. However, as central banks increased rates to combat inflation, the attractiveness of such plans diminished.
Introduction of New Instalment Loans
In place of Apple Pay Later, Apple is introducing a new service that will allow users to apply for instalment loans from credit and debit card issuers at checkout. This new offering will be available globally, starting later this year. According to Apple, users will be able to access instalment loans through various banks and lenders integrated with Apple Pay. The rollout will commence in countries including Australia, Spain, the UK, and the US, with banks like ANZ, CaixaBank, HSBC, Monzo, Citi, and Synchrony participating.
Global Expansion and Bank Partnerships
The new instalment loan service represents a significant shift for Apple, indicating a move towards leveraging existing financial institutions rather than building its own financial services from scratch. This collaboration aims to provide flexible payment options to more users around the world. By partnering with established banks and lenders, Apple intends to enhance the reach and convenience of Apple Pay.
Managing Existing Loans
For those who have already taken out loans through Apple Pay Later, there is no cause for concern. Apple has assured users that they will continue to manage their existing loans through the Apple Wallet app. This transition ensures that current borrowers will not be adversely affected by the discontinuation of the service.
Implications and Future Plans
The decision to shut down Apple Pay Later underscores the challenges Apple faced in establishing a standalone financial services arm. The company, known for its innovative technology products, found the financial sector to be highly competitive and complex. By integrating with established financial institutions like Affirm, Apple is positioning itself to offer similar services without the burdensome task of managing the financial aspects internally.
Apple’s move reflects a broader trend in the tech industry, where companies are increasingly collaborating with financial institutions to provide enhanced services. This partnership approach allows tech companies to focus on their core competencies while leveraging the expertise of banks and lenders in financial management.
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