Apple Pay Later Is Dead (But Better Things Are Coming in iOS 18)
Credit: Apple
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Less than a year after Apple Pay Later went live in the United States, Apple has shuttered the service to make room for new payment features coming to iOS 18 later this year.
Apple Pay Later was first announced at Apple’s 2022 Worldwide Developers Conference, as a new Apple Pay integrated “buy now, pay later” (BNPL) service. However, it didn’t begin rolling out until April 2023, and took another six months before it became available to everyone.
Like the Apple Card, Apple Pay Later was integrated into the iPhone Wallet app, allowing users to opt to “Pay Later” when completing an Apple Pay transaction. This would divide the purchase into four payments, with the first taken immediately off the user’s credit or debit card and the remaining balance paid off at two-week intervals over the next six weeks, with no fees or interest. The maximum purchase that could be financed through Apple Pay Later was $1,000, although the actual limit depended on credit eligibility.
Under the hood, Apple Pay Later used a virtual Mastercard to handle the transaction, which means it could be used anywhere that contactless Mastercard payments were accepted. The store didn’t even need to know that the customer was opting for Apple Pay Later, as they received the full amount immediately, just like any other Apple Pay transaction.
The short-term loans provided by Apple Pay Later were underwritten by Apple Financing LLC, an Apple subsidiary, although Apple relied on its Apple Card partner, Goldman Sachs, to provide the necessary access to the Mastercard network.
It’s unclear how popular Apple Pay Later was among customers; it may not have even had a long enough run to know for sure, but now Apple has decided to get out of the BNPL game and cede the playing field to more experienced lenders.
Apple shared the news in a statement to 9to5Mac, noting that effectively immediately, users will no longer be able to use Apple Pay Later, although existing loans can still be managed in the Wallet app until they’ve been fully paid. Since the maximum length of an Apple Pay Later loan is six weeks, that means that the service will be shut down completely by the end of July.
However, once iOS 18 launches in September, iPhone users will potentially have access to many other options. In an announcement last week, Apple shared that Apple Pay users will be able to “view and redeem rewards and access instalment loan offerings from eligible credit or debit cards.” This means that rather than setting up a new BNPL loan with Apple, customers will be able to use whatever service their existing bank or credit card issuer offers — with terms to match.
The added benefit is that, unlike Apple Pay Later, these services will be available globally, open to any financial institution that’s willing to integrate them into Apple Pay — and Apple has already announced a few launch partners around the world, including ANX in Australia, CaixaBank in Spain, HSBC and Monzo in the UK, and Citi, Synchrony, and Fiserve issuers in the US.
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.Apple’s statment to 9to5Mac
Affirm is also partnering with Apple to allow folks in the US to apply for a BNPL loan when checking out with Apple Pay, making it the most direct replacement for Apple Pay Later for folks who don’t have any options for instalment payments through their existing financial institution.
