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Apple dumps 'Apple Pay Later' for new BNPL partnerships

Apple (AAPL) has announced its decision to scrap its buy now, pay later feature. The service, named "Apple Pay Later," which was launched just last fall, will now be replaced by the tech giant's new buy now, pay later partnerships with industry heavyweights Affirm (AFRM) and Citi (C), set to be unveiled in the fall of 2024.

Yahoo Finance's Madison Mills breaks down the details.

Catch Yahoo Finance's full interview with Affirm founder and CEO Max Levchin as part of the Opening Bid with Brian Sozzi.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

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This post was written by Angel Smith.

Video transcript

All right, everyone.

Well, we've got to talk about Apple as well and some other technology, Apple is scrapping its buy.

Now pay later service here, the loan program dubbed Apple Pay later launched just last year and to break down what's next?

Yahoo Finance's very own.

Madison Mills is here with us.

Hey, Matty.

Hey Brad.

So I personally had not used this service but a lot of people had.

That's because Apple's buy.

Now pay later option allowed users was launched in October 2023 to have their payments be in four stas over the course of six weeks up to $1000.

That's a great option particularly for those who don't necessarily have a credit card or credit on hand to be able to receive access to a broader form of credit.

Now, Apple will be rolling back this program and instead they're going to be moving forward with their partnerships with the likes of a firm and also city.

It's kind of no surprise that we're seeing them roll this back, given that they're partnering with a firm, which is one of the big competitors that Apple Pay later was dealing with when it came to their initial announcement of buy now pay later.

Now what does this mean for consumers in the broader buy now?

Pay later story, right.

Well, I took a look at some data from Bank of America about buy now pay later and it shows us that it is starting to slow year over year.

But the households that are using it the most guess which age group is using buy now pay later or the most millennials.

Gen Z I was shocked this is just big of America's data.

So don't you know, get too mad at me.

This is just one potential opinion here.

But I was really shocked to hear that nearly half of households though that use the payment method in March of 2024 are earning less than $50,000 a year.

Those houses that do have heavy buy now pay later appear to have higher levels of credit and debit cards spending relative to the overall payment cycle compared to pre COVID levels.

So interesting to see this kind of uptake and buy now pay later users.

Maybe a company like apple saying taking on the capital risk of that is just not a value proposition that makes sense for them.

Instead, we're going to let a firm, we're going to let all these other players in the space take on that capital risk.