Apple partners with Affirm for BNPL services

Apple has announced its decision to discontinue its buy now, pay later service but will be introducing a new version through third-party partnerships like Affirm later this year. The buy now, pay later (BNPL) trend saw significant growth during the COVID-19 pandemic, resulting in $75 billion in online spending in 2023. Apple's upcoming solution aims to provide flexible payment options globally in collaboration with Apple Pay-enabled banks and lenders.

For existing users of Apple's BNPL service, Apple Pay Later, they will still be able to manage and pay their loans through the Wallet app. Apple Pay users can look forward to new installment loan options, including the ability to apply for BNPL loans directly through Affirm when using Apple Pay.

Apple's original BNPL product allowed customers to make interest-free installment payments for purchases up to $1,000, competing with providers like Affirm. In contrast, Affirm offers a range of installment options, including monthly payments for higher-priced items.

Industry experts view Apple's decision as a strategic move to enhance its Apple Pay ecosystem and maintain customer relationships. By partnering with Affirm for BNPL services, Apple aims to reduce risks and solidify its market position.

While Apple may explore collaborations with other BNPL providers in the future, Affirm's technology, underwriting expertise, and user-friendly policies make it a preferred choice. Affirm's stock experienced a slight decline following lower-than-expected retail sales data in May.

Apple's shift in its buy now, pay later service reflects the evolving landscape of digital payments. By teaming up with Affirm, Apple is poised to offer enhanced payment options to its users, ensuring convenience and flexibility in managing their finances. This strategic partnership not only benefits Apple but also signifies the growing importance of BNPL services in the digital economy.