Apple shut down popular feature marking major blow for iPhone users

Apple has shut down a popular feature just one year after launching it in a major blow to iPhone users.

The tech giant pulled its ‘buy now, pay later, known as Apple Pay Later, which let users take out loans for purchases up to $1,000 and pay off the borrowed amount in four installments across six weeks.

While the option is no longer available, consumers who have existing loans won’t be affected.

Apple’s decision to cancel its ‘buy now, pay later’ service comes as it said it plans to introduce a similar program in the fall allowing users to access loans provided by eligible credit and debit card companies. 

Apple Pay Later launched with fanfare in March 2023, which was the company’s answer to the growing popularity of buy now, pay later services globally, and considered a sizeable threat to companies like Klarna, Affirm and others.

However, Apple’s feature was only available where its digital payment service was accepted, whereas the other buy now, pay later companies had deeply integrated themselves into millions of merchant websites.

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‘With the introduction of this new global installment loan offering, we will no longer offer Apple Pay Later in the U.S.,’ Apple said late Monday. 

‘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.’ 

The announcement has led to Apple discontinuing any new Apple Pay Later loans. 

‘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,’ Apple told 9to5Mac.

Instead of working as a lender itself, Apple will focus on helping users secure other loan options that ‘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,’ the company added.

This option will be available in the US with the Discover credit card and retail loan lenders Synchrony Financial and Fiserv Solutions that can be accessed directly through Apple Pay.

The new feature will also allow users to apply for a loan with Affirm – a buy now, pay later lender that offers short-term loans for both online and in-store purchases. 

Users will be able to add the loan option during checkout that will give them the ability to apply for the loan through a credit card and loan service or directly through Affirm.

The new loan feature will still omit any hidden fees, offer zero percent interest and allow users to split payments into four installments to be paid over six weeks.

According to a June survey by LendingTree, about 13 percent of 889 respondents said they had used Apple’s buy now, pay later feature while one in three Americans said they have considered applying for an installment loan.

Users in Australia, Spain and the UK – which previously did not have access to Apple’s buy now, pay later feature – will also have access to installment options starting in the fall.

Apple rolled out ‘early access’ to the feature in March 2023, issuing the loans itself, but it didn’t officially launch until October.

The partnership with its former competitor Affirm could help the company expand its loan program to offer longer-term installment options, according to JPMorgan analyst Reginald Smith.

‘Affirm does not expect a meaningful impact on FY25 revenue . . . but it is hard to imagine adding a platform of this magnitude doesn’t move the needle,’ Smith wrote last week, according to the Financial Times.

The shift to partner with Affirm and other credit and debit card companies to replace the buy now, pay later option was introduced at the Worldwide Developers Conference in California last week.

DailyMail.com has reached out to Apple for comment.