Apple has decided to end its in-house buy now, pay later scheme in the US after launching it just last year. Instead, the technology giant will now offer customers payment plans through third-party credit and debit card lenders. Existing borrowers will still be able to manage payments using Apple’s Wallet app. This decision marks a step back for Apple from its plans to offer traditional financial services.
The Apple Pay Later scheme in the US allowed users to break up the cost of purchases worth up to $1,000 into four instalments over six weeks without paying interest or fees. Essentially, Apple was providing customers with loans, bypassing banks and other traditional lenders, through its new subsidiary, Apple Financing. At a time when US interest rates were low, this move was appealing to consumers. However, as interest rates rise to combat inflation, such plans became less attractive.
During its recent annual developer event, Apple announced partnerships with banks like Citi in the US, HSBC in the UK, and ANZ in Australia to offer instalment payment options through its upcoming iOS 18 operating system, expected to be released later this year. These partnerships will allow customers to apply for credit from these banks directly through the Wallet app and make payments over time without having to leave the app. This move is seen as a way for Apple to provide customers with more flexibility and choice when it comes to managing their finances while still maintaining control over their data and transactions through its own platform.