So Much for the Apple Bank
Chance Miller
Lost a bit amidst WWDC, Apple Intelligence, and the ongoing war with the EU:
Apple has announced that it is no longer offering Apple Pay Later, the “buy now, pay later” service that launched in the United States last year. The change goes into effect starting today, Apple says. Existing users with open Apple Pay Later loans will still be able to manage them via the Wallet app.
In its place, Apple is focusing on new features coming globally to Apple Pay later this year, including the ability to access installment loan offerings from eligible credit or debit cards, as well as Affirm.
This was especially weird since Apple has just rolled out the feature just over a year ago in the US. Now, it may be this simple:
Apple emphasizes that its focus is on the new installment loan features coming to Apple Pay later this year. These features will be available in multiple countries around the world. Apple Pay Later, meanwhile, was only ever available in the United States.
But if that's the case, why roll this out at all? They've had installment payments for quite some time via Apple Card. And yes, they've been working on a more global monthly installment payment system for a while, but it's also not ready to roll yet. Instead, you can't help but wonder if Apple was having either a fraud or delinquency problem because this was the first monetary product where Apple was serving as the bank.
As I wrote about the announcement of the feature at WWDC back in 2022:
This is not only the third step towards the proverbial Apple Bank, it’s the most important yet in that Apple is taking on the risk (and doing the risk assessment) by doing the lending themselves. Off their own balance sheet.
So perhaps this was simply too much risk for Apple to handle. And/or the risk wasn't worth the reward. But it is interesting in the context of potential future banking products – one area where Apple seemingly has growth and could become a large, all-important services business for them. Especially given that their partnership with Goldman Sachs – the partner on the Apple Card and one would-have-been partner on future payment offerings such as this – is seemingly in the process of being unwound.