Apple Is Discontinuing Its Pay Later Option

Apple has announced that it is discontinuing its Pay Later option, a popular pay-in-four loan used by consumers.

CNBC reports that the electronics giant discontinued the option as of Monday, June 17, and will supplant the loss with the option of using other third-party companies, such as Affirm, and credit card providers like Citigroup.

“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,” a spokesperson for the company told the outlet. “With the introduction of this new global installment loan offering, we will no longer offer Apple Pay Later in the U.S.”

Customers who used the Pay Later option were able to make purchases up to $1,000 and pay off the loan in four interest-free installments. The loans, according to the outlet, were issued through a wholly owned subsidiary of the tech giant. The company also said that the Pay Later option was only available in the United States, leaving its international consumers at a disadvantage.

News of the discontinuation of the Pay Later loan comes on the heels of the announcement that the company was expanding its payment options.

At its Worldwide Developers Conference this week in Cupertino, California, the tech giant showcased improvements to its digital wallet, Apple Pay, and made a number of noteworthy announcements. These developments represent a strengthening alliance between the company and banks, providing advantages to both parties in the fiercely competitive financial technology market.

Banks benefit most from these advances because they expand the use of credit card products in retail and e-commerce, which encourages consumer spending and keeps them competitive with new payment options. These advantages are not without a cost, though. A fee of 0.15% will be paid by U.S. banks to Apple for each credit card transaction done using Apple Pay.

The ability for Apple customers to use their card rewards points to pay for items is another improvement. This gives loyalty programs a huge boost in value and gives banks another way to interact with consumers and close deals. The issuers of Fiserv, Discover Financial Services, and Synchrony are expected to be the first to provide this feature.