Reimagining Finance: APPLE'S Shift from Pay Later Service to Global Payment Flexibility

Apple’s pivot is only the latest in a wave of tech innovation in finance. And just a few months after its launch, Apple Pay Later will be put on hold. Apple Pay Later is the company’s foray into ‘buy now, pay later’ services. This article explains why and what this means for Apple’s future in financial services, and how it will affect consumers around the world.

The Sunset of APPLE PAY LATER

This marked the launch of Apple Pay Later, first made available to US customers in October 2023, which promised to transform the way consumers paid over time. It was greeted with open arms: a no-interest, no-fee, no-impact-on-your-credit-score way of spreading the cost of eligible purchases between $75 and $1,000 over four payments, payable over a six-week period. Then, in June, Apple notified 9to5Mac of its intention to shut down the service. The tech giant didn’t offer an explanation for this sudden stop, but what is clear is that the outlook for Apple’s financial services is anything but dim.

A New Dawn for Global Payment Solutions

The Future Landscape of APPLE'S Financial Services

Apple’s statement foreshadows an even bigger, more global version of this kind of service. Later this year, users around the world will be able to access installment loans with banks and other lenders including those tied to credit and debit cards. This marks a real shift from an Apple-owned service to one that is partnership-oriented and embedding Apple Pay-enabled banks into the installment offering. The global version of installment loans ultimately seems designed to bring greater flexible payments to a broader customer base, and to reinforce the view of Apple-Pay as a secure and private payment method.

APPLE'S Banking Aspirations and Partnerships

Apple has had big ambitions in banking for a while; it’s tried savings accounts and credit cards funded by partnerships with companies like Goldman Sachs and Mastercard. And since Apple could do anything, Apple Pay Later would be the first service that it controlled entirely. Apple’s banking strategy seems to be moving forward, with the company pivoting via partnerships and connecting to wider payment ecosystems.

The Impact of Transitioning from APPLE PAY LATER

For Users with Active APPLE PAY LATER Loans

It’s not clear what will happen to customers’ existing Apple Pay Later lines of credit (Apple says it’s in touch with those who have open loans, and that they’ll continue to be serviced and managed through the Wallet app) but the company is being careful to address users’ concerns. Apple is famous for its ‘you-won’t-have-to-wait-very-much-longer’ attitude towards users, a manifestation of its ‘it just works’ approach to design.

The Role of Affirm and Other Financial Services

This recent announcement also echoes Apple’s announcement last week, that it will let customers in the US apply for loans directly from Affirm when checking out on Apple Pay, a move that at the time was puzzling, but now appears to be part of an effort to replace Apple Pay Later with a third-party service such as Affirm.

Challenges and Opportunities Ahead

The decision to shutter Apple Pay Later might surprise some, especially given the service’s billed presentation back at WWDC 2022 as an intriguing step into financial services. Reports that opposition within Goldman Sachs complicated relationships hint at the difficulties Apple faces in enlarging its banking division.

What the Future Holds: Innovating Payment Flexibility Globally

Another example of Apple’s willingness to rethink a strategy in pursuit of taking the next step forward is the shift away from Apple Pay Later towards offering a global, digital-first instalment loan via third-party agreements. The company would still leverage the advantages that result from the digital nature of contemporary banking and payments systems and therefore follow through on its preliminary attempt to democratise flexible payment options.

About APPLE

The company’s well-publicised mission to make ‘the best personal computing products on earth’ and ‘revolutionise personal technology and digital media as we know it’ reflects Apple’s commitment to innovation. The company’s technological preeminence is evident in its long record of designing sophisticated products. From the first Apple computer in 1976 to groundbreaking services such as Apple Pay, Apple has broken new technological ground. Apple Pay Later supports the company’s stated mission through its relentless pursuit of reshaping user experiences in the digital world by reimagining the financial services that consumers use.