Apple Pay Later Is Dead, Thank Goodness

It's been one week since Apple announced that third-party Buy Now Pay Later (BNPL) services, such as Affirm, will be offered within the Apple Pay platform. Now, Apple says that its in-house BNPL service, called Apple Pay Later, is no longer offering loans.

Apple Pay Later launched in mid-2023. It was a fairly typical BNPL service, offering short-term loans with a 0% interest rate and minimal regulatory guardrails. The only thing that made Apple Pay Later stand out from the crowd was its Apple Pay integration—any purchase made with Apple Pay was eligible for an Apple Pay Later loan.

In a statement to 9to5Mac, Apple explains that it wants to offer deep integration for a variety of banks and lenders. You'll be able to get an Affirm loan through Apple Pay, see banking information when selecting a debit card from your Wallet, and so on. Evidently, Apple Pay Later cannot coexist with such third-party banking and lending integrations, so it had to be axed.

"Starting later this year, users across the globe will be able to access installment loans offered through credit and debit cards, as well as lenders, when checking out with Apple Pay. With the introduction of this new global installment loan offering, we will no longer offer Apple Pay Later in the U.S. Our focus continues to be on providing our users with access to easy, secure and private payment options with Apple Pay, and this solution will enable us to bring flexible payments to more users, in more places across the globe, in collaboration with Apple Pay enabled banks and lenders."

From a technical perspective, there's no reason to kill off Apple Pay Later. It could simply be listed alongside rival BNPL services within the Apple Pay system. So, this appears to be a business decision—banks and lenders may have refused to be listed as alternatives to Apple Pay Later, a situation that would have robbed the Apple Pay platform of valuable integrations that customers desire.

Or, Apple may fear the regulatory repercussions of prioritizing its lending service over that of competitors. The company is currently facing accusations of anti-competitive practices in several countries, so this seems like reasonable speculation.

There may be an even simpler explanation to this mystery—BNPL services like Apple Pay Later are regularly compared to predatory lending by the U.S. government and other parties. Apple is attempting to dissolve its relationship with Goldman Sachs (the bank that makes Apple Pay Later and the Apple credit card possible), so it may be taking this opportunity to reassess its position in the banking and lending industries. (Third-party BNPL services within Apple Pay will surely give Apple a cut of each purchase, so in any case, Apple is making its money.)

We regularly criticize BNPL services, including Apple Pay Later. Personally, I'm glad to see that Apple is no longer putting its name behind dubious lending practices, though I'm disappointed to see that third-party alternatives like Affirm are making their way to the Apple Pay platform.

You can no longer ask for an Apple Pay Later loan. Please note that existing loans have not been forgiven. You still need to pay back any Apple Pay Later loan that you've opened.

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