- Apple is shutting down Apple Pay Later, its BNPL offering, just 15 months after launching the tool.
- Apple said that the decision will help the company launch a BNPL offering to cardholders across the globe.
- Apple may have also wanted to avoid the consequences of the CFBP’s recent interpretive rule, which classifies BNPL providers as credit card issuers under the Truth in Lending Act.
March 28, 2023 to June 17, 2024. That is the lifespan of Apple Pay Later, Apple’s buy now, pay later (BNPL) tool.
Apple launched the tool last year to allow Apple cardholders to pay for their purchases under $1,000 in four separate installments over the course of six weeks. The service was free, and did not charge users interest or any other fees. Consumers benefitted from a six week float on their purchase amount, while Apple benefitted by attracting new cardholders and potentially enticing consumers to spend more money using their Apple card. This week, Apple announced it has shut down the Apple Pay Later service.
But even though Apple Pay Later is shutting down, the company is replacing the BNPL method with another BNPL option. In a statement to 9to5Mac, an Apple spokesperson said, “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.”
According to this statement, the major reason Apple is switching to a new BNPL tool is that the new offering will make installment purchases available to cardholders across the globe. Additionally, Apple will no longer hold the paper on the short-term loan. The company’s new BNPL tool will leverage Citi to furnish the short-term loan.
There is another, unspoken reason Apple may have decided to change its role in the BNPL game, however. The move may have to do with the CFPB’s recent interpretive rule for the BNPL industry, which classifies BNPL providers as credit card issuers under the Truth in Lending Act. This would subject Apple to a range of new obligations, including having to investigate customer disputes, pause payments, provide refunds, and issue credits when applicable.
Photo by Junseong Lee on Unsplash
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