Apple Discontinues Buy Now Pay Later Service Amid Regulatory Concerns

Apple has quietly discontinued its buy now pay later service, a move that's likely due to growing regulatory concerns.

Regulators have been cracking down on the buy now pay later industry, citing high interest rates and lack of transparency.

The service allowed customers to split purchases into interest-free installments, but it's unclear what alternatives will be available to consumers.

Apple hasn't made an official statement about the discontinuation, but sources suggest the decision was made due to increasing pressure from regulators.

Apple has decided to discontinue its Buy Now, Pay Later (BNPL) service in the US, a move that follows the Consumer Financial Protection Bureau's policy statement treating BNPL providers as credit card lenders.

The service, called Apple Pay Later, allowed users to take out short-term loans of between $50 and $1,000 and repay those loans in installments. Users will no longer be able to access this service, but they will still be able to manage any open loans within the Wallet app.

The discontinuation of Apple Pay Later is likely due to the changing interest rate environment, as one commenter noted that low interest rates made it easier for Apple to finance these loans. With interest rates up, it's no longer a viable option for the company.

Apple will replace Apple Pay Later with a new installment loan feature, which will be rolled out later this year. This feature will allow users to access installment loans through credit and debit cards, and other lenders, when they check out with Apple Pay.

BNPL stands for Buy Now, Pay Later, a service that allows customers to pay for purchases over time, often with interest-free installment plans.

This type of service has become increasingly popular in recent years, with many retailers and fintech companies offering BNPL options to their customers.

BNPL services typically don't charge interest or fees, but they may charge late payment fees if the customer misses a payment.

Some BNPL services also offer rewards or cashback to customers who make on-time payments.

BNPL services have become a convenient and flexible way for customers to manage their finances and make purchases.

Apple Discontinuing BNPL is likely due to rising interest rates. This change makes it too expensive for Apple to finance their "buy now, pay later" (BNPL) service.

Interest rates being up is a major factor in this decision, according to orlanz. They point out that when interest rates are low, it's easier for Apple to get a low-interest loan against their incoming revenue to fund BNPL. However, with interest rates rising, these loans are no longer renewable at a low rate, making it too costly for Apple to continue.

The impact of rising interest rates on BNPL services is a significant concern. As orlanz notes, this change doesn't make sense in today's economy, especially outside of a very risk-averse economy.

Apple's decision to discontinue Buy Now, Pay Later (BNPL) has significant implications for consumers and the financial industry.

The move may lead to a shift in consumer behavior, with many turning to other BNPL services offered by third-party providers.

Apple's exit from the BNPL market could also have a ripple effect on the financial services industry, potentially leading to increased competition and innovation.

Consumers who had grown accustomed to using Apple's BNPL service may experience some disruption, but many are likely to adapt to new options.

The discontinuation of Apple's BNPL service is a notable development in the evolving landscape of consumer finance.

Apple has confirmed that users with open loans from the discontinued 'Pay Later' service will still be able to manage them within the Wallet app.

The 'Pay Later' program was launched last year in the US using an in-house platform, with Apple issuing loans to customers via a new subsidiary.

This means that users who already have loans won't be left in the dark, and they can continue to make payments and manage their accounts as before.

The new installment loan feature is expected to roll out later this year, providing users with alternative payment options.

Apple's decision to allow users to manage their existing loans within the Wallet app shows that they're committed to making the transition as smooth as possible.

This is good news for users who may have been worried about how they would manage their loans after the service was discontinued.

The 'Pay Later' program was initially popular, with nearly one-fifth of BNPL customers using it in the first three months after its launch.

The concept of Buy Now, Pay Later (BNPL) has been around for decades, with the first recorded instance dating back to the 1980s in the United States.

BNPL gained popularity in the 1990s with the rise of catalog shopping, where customers could order products from catalogs and pay for them later.

The first BNPL service was introduced by a company called CompuServe, which allowed customers to pay for purchases over time.

In the early 2000s, BNPL services became more widespread, with companies like PayPal and Google introducing their own payment plans.

By 2010, BNPL services had become a staple in the online shopping experience, with many retailers offering their own payment plans.

Today, BNPL services are offered by a wide range of companies, from fintech startups to established retailers.