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Apple Pay users will soon be able to access instalment plans via credit and debit cards linked to the app, thanks to new partnerships set to launch in the US, UK, Spain and Australia.

Apple has  a range of updates to Apple Pay that aim to make buy now, pay later (BNPL) services more accessible to users.

Beginning in Australia, Apple will partner with ANZ to allow cardholders to enter  when checking out online or in-app using Apple Pay via iPhone or iPad.

Similar functionality will be rolled out in the UK through partnerships with HSBC and Monzo; in Spain through a partnership with CaixaBank; and in the US through partnerships with Citi, Synchrony and issuers with Fiserv.

Exclusively in the US, Apple Pay users will also be able to enter instalment plans provided by Affirm when checking out using Apple Pay.

What happened to Apple Pay Later?

The opening up of Apple Pay to third-party BNPL providers comes little more than a year after the launch of Apple’s own BNPL service, Apple Pay Later.

In March 2023, Apple  its highly anticipated BNPL service exclusively in the US, allowing customers to split purchases into four payments spread over six weeks with no fees and no interest charges.

Apple Pay Later offers loans of $50 to $1,000 for online or in-app purchases made via iPhone or iPad, and the service can be used with any merchant that accepts Apple Pay.

In its first three months, Apple Pay Later grew to become the third most-used BNPL platform in the US, according to a  by market research firm J.D. Power.

Apple Pay Later was able to leapfrog long-standing incumbents such as Sezzle and Zip, J.D. Power noted, but it was less used than both PayPal and Afterpay respectively.

However, BNPL’s total share of retail payments is still minuscule, despite the entrance of established brands such as PayPal and Apple.

In 2023, according to , BNPL accounted for $75bn of online spending in the US.

As noted by Grant Halverson, CEO of Australia’s McLean Roche consultancy, this accounts for about 0.05 percent of all retail payments worldwide.

BNPL remains a niche product with negligible usage, Halverson added. It also remains unprofitable, even without specific regulation.

The performance of Apple Pay Later has been “modest at best”, he said, and this is likely to account for the service’s failure to launch in markets outside the US.

Apple Pay Later passes on Australia

In August last year, Apple confirmed that Apple Pay Later would not launch in Australia, citing the “challenging regulatory structure” that was likely to emerge in the country.

This month, as expected, Australia’s Labor government introduced the country’s first bill to regulate BNPL in the same way as other credit products.

For BNPL providers, this will mean holding and maintaining an Australian credit licence, and it will also mean collecting specific information related to customers’ income, expenses and financial health.

Stephen Jones, Australia’s assistant treasurer and minister for financial services, said in a parliamentary speech when introducing the bill that BNPL has benefited some users and merchants but has also led to consumer harm.

“The risks of BNPL disproportionately impact upon vulnerable Australians, including First Nations Australians and those struggling financially,” he said.

“Most Australians would think of BNPL as a form of credit and that it should be regulated accordingly. We are acting to do that.”

Jones cited a , conducted by the Good Shepherd charity, which found that 70 percent of financial counsellors say their clients have missed other payments and either cut back on or gone without essentials in order to pay BNPL debts.