Apple Pay Could Soon Gain a Third Pay Later Service
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Last year, Apple made a sharp left turn, abandoning its own financial services ambitions in Apple Pay Later and not only ceding the market to third-party services but actively embracing them in iOS 18.
Apple Pay Later was one of Apple’s shortest-lived initiatives. In fact, it was available for less time than it actually took to get it out in the first place. Apple announced Apple Pay Later at its 2022 Worldwide Developers Conference (WWDC) in June but didn’t even begin rolling it out until April 2023 — almost a year later. Even then, it took another six months before it was available to everyone in the US (like most of Apple’s financial services, this was intended to be a US-only affair from the start).
Apple’s answer to buy-now-pay-later (BNPL) services was a clever one. Like the Apple Card and Apple Cash, the entire experience was integrated into the iPhone’s Wallet app, allowing customers to divide nearly any standard Apple Pay transaction into four equal payments. The first would be taken immediately at the time of purchase, while the three remaining installments would be debited at two-week intervals from the customer’s chosen payment method.
When a customer opted for Apple Pay Later, their iPhone would present a virtual Mastercard to the merchant, who would receive the full amount like any other Mastercard transaction. They wouldn’t know or care that a BNPL service was involved as it was a normal card purchase from their perspective.
The interesting thing about Apple Pay later is that, unlike the Apple Card, the financing was handled entirely by an Apple subsidiary, Apple Financing LLC. The company’s Apple Card partner, Goldman Sachs, was still involved in handling the Mastercard transactions, but Apple, not Goldman, carried the loans. The maximum amount of an Apple Pay Later purchase was $1,000, subject to credit approval, and the maximum term was six weeks, so Apple wasn’t handling any huge loans here. Still, somewhere along the way, it decided it wasn’t worth being in the BNPL game at all.
Instead, Apple decided to open up the same level of BNPL integration to financial services companies with far more experience in this area. During last year’s WWDC, it announced that users would be able to “view and redeem rewards, and access installment loan offerings from eligible credit or debit cards” and “apply for loans directly through Affirm when they check out with Apple Pay.”
Six days after it made that announcement, and less than a year after it fully launched in the US, Apple announced that Apple Pay Later was dead.
When iOS 18 was released, the same option in Apple Pay that used to tie into Apple Pay Later instead offered BNPL loans through Affirm and Klarna. Unlike Apple’s own BNPL service, the new feature also opened the doors to global partnerships, with Klarna expanding into Canada and the UK, and Apple also adding ANX in Australia, CaixaBank in Spain, and HSBC and Monzo in the UK.
Apple also promised Citi, Synchrony, and Fiserve issuers would be coming to the US, and the first of those, Synchrony, looks like it’s about to come on board. Earlier today, MacRumors noticed that the financial services company had been added to Apple’s participating banks page, although it vanished a few hours later. This list isn’t necessarily comprehensive, as there are no references to any services that allow paying with installments in Canada, even though Klarna has been live here since December 11, when iOS 18.2 was released.
According to MacRumors, the integration with Synchrony isn’t live yet. However, the fact that it appeared on Apple’s page of supported providers at all suggests it’s coming soon; most likely, someone at Apple jumped the gun and published the update before everything was ready.
