Apple Inc. is making significant changes to its financial services offerings by discontinuing its Pay Later program, a move that marks a strategic shift in the company’s approach to providing installment payment options.
The Pay Later program, which allowed customers to make purchases and pay them off in four installments for amounts up to $1,000, is being phased out as Apple integrates third-party financial services into its ecosystem.
Announced on Monday, Apple revealed that it would no longer offer loans through the Apple Pay Later program. This decision comes in conjunction with the company’s plan to incorporate services from Affirm Holdings Inc. and Citigroup Inc. into the forthcoming iOS 18 software.
According to a company spokesperson, “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.”
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This new global installment loan offering will be accessible through the Apple Pay platform, effectively replacing the existing Pay Later service in the United States. “With the introduction of this new global installment loan offering, we will no longer offer Apple Pay Later in the US,” the spokesperson added.
The Pay Later program, launched in the US last year, represented Apple’s first foray into providing in-house financial services. Apple issued loans directly to customers via a new subsidiary while leveraging partnerships with Goldman Sachs Group Inc. and MasterCard Inc. to facilitate the process.
Despite the program’s initial success, Apple’s pivot towards integrating third-party services reflects a broader strategy to enhance the flexibility and reach of its payment options.
With the rollout of iOS 18, Apple Pay users worldwide will benefit from expanded access to installment loans, enhancing the functionality and appeal of Apple Pay. Users with existing Pay Later loans will still be able to manage their payments through the Wallet app, ensuring a seamless transition to the new system.
Apple emphasized its commitment to providing secure and private payment solutions, stating,
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“Our focus continues to be on providing our users with access to easy, secure, and private payment options with Apple Pay. 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.”
By shifting away from the Pay Later program and embracing a more collaborative approach with established financial institutions, Apple aims to offer a more versatile and widespread installment loan service, reinforcing its position in the competitive digital payments market.