SAN FRANCISCO — Apple is changing its course on its buy now, pay later (BNPL) ambitions, as a classic Google-like move where they are shutting the service just ten months after its arrival. But now, there’s a twist in favor of partnering with established BNPL providers like Affirm.
This approach will allow Apple to move into this growing market without building and managing its own BNPL infrastructure.
This move after BNPL continues to surge in popularity. The pandemic accelerated the trend of online shopping, and BNPL options provide a convenient way to split purchases into installments.
In a statement according to Reuters, Apple said its new 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.” It did not comment further about why it was ending its independent BNPL offering.
Existing users of the BNPL service, Apple Pay Later will still be able to manage and pay open loans via the Wallet app, the company said.
Apple announced last week that Apple Pay users would be able to access new installment loan offerings this fall, including the ability to apply for BNPL loans directly through Affirm when they check out with Apple Pay. Customers will also be able to access installments from credit and debit cards, the tech giant said.
Analysts had viewed Apple’s original BNPL product as a competitor to BNPL providers like Affirm. It offered customers the ability to buy products and pay in four interest-free installments for items up to $1,000. Affirm offers users the option to pay for products in two or four installments, as well as monthly installments for higher-cost items.
“To me, this sounds a lot like what we see happening with debit cards,” said Sean Gelles, director of payments intelligence at J.D. Power. “Regardless of which debit card a consumer has funding their purchases, as long as they use Apple Pay, it’s Apple that owns the experience.”
