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After a seven-month invite-only launch, Apple’s buy now, payer later (BNPL) service is now available throughout the US, except in states where regulatory hurdles remain.

Apple sleuths at  have discovered that Apple Pay Later, the technology giant’s highly-anticipated BNPL entry, has quietly moved from soft launch to full launch.

On Tuesday (October 24), MacRumours noticed that the following line has been removed from the service’s support documents: “Apple Pay Later is currently only available to customers invited to access a prerelease version.”

In its place, Apple has added the following line: “Apple Pay Later is currently unavailable in Hawaii, New Mexico, Wisconsin, and the U.S. territories.”

At the same time, MacRumours.com also reports that Apple Pay Later is available for general use via the Wallet app on iPhone.

The move brings to an end a seven-month soft launch that began in March this year, during which Apple “” to participate in an early-access version of the service.

BNPL with almost no catches

The BNPL service allows Apple Pay users to split their purchases into four instalments spread over six weeks, with zero interest and no fees.

There are also no late charges. If a user fails to pay back their loan on time, their account is simply disabled from taking out new loans, and the failure to repay is reported to a credit bureau.

Apple Pay Later can be used for loans of $50 to $1,000, and loan agreements can be made for online and in-app purchases from any merchant that accepts Apple Pay.

Apple Pay Later is enabled through the Mastercard Installments program, so merchants that accept Apple Pay do not need to do anything to implement Apple Pay Later.

Goldman Sachs is the issuer of the Mastercard payment credential used to complete Apple Pay Later purchases.

Soft launch but strong landing

Despite the invite-only launch, Apple Pay Later has already risen to become the third most-used BNPL service in the US.

In Q2, market research firm J.D. Power  8,000 BNPL users in the US, and found that PayPal, Afterpay and Apple Pay Later were their preferred services.

Of those surveyed, 39 percent had used PayPal Pay in 4 in the last four months, 33 percent had used Afterpay and 19 percent had used Apple Pay Later.

Moreover, Apple Pay Later’s usage was higher than long-time BNPL providers such as Sezzle and Zip, which have been available in the US since 2017 and 2021 respectively.

Regulatory hurdles remain in three states

Apple Financing LLC, the Apple subsidiary that issues BNPL loans, holds  in 15 states.

Depending on the state, these licences are usually described as “small loan”, “consumer loan” or “installment loan” licences.

In most US states, Apple Financing LLC is not required to obtain a lending specific licence to operate Apple Pay Later.

But in New Mexico, Hawaii and Wisconsin, all three states have introduced new laws that impose tough restrictions on “small loan” and “installment loan” lenders.

In March 2022, New Mexico governor Michelle Lujan Grisham signed into law  — one of the most restrictive BNPL laws in the US.

In effect since January 1 this year, the law effectively prohibits all non-bank BNPL activity in the state by requiring that small loan lenders are certified as federally insured depository institutions.

In June 2021, Hawaii enacted , which introduced a new licensing requirement for “installment lenders” that offer loans of up to $1,500.

To be eligible for a , HB 1192 requires that:

- Installment loans of less than $500 have a repayment term of at least two months, and
- Installment loans of $500 or more have a repayment term of at least four months.

Apple Pay Later loans, with a maximum repayment period of a month and a half, do not meet these terms.

In Wisconsin, under , loans offered by “payday lenders” are capped at $1,500 or 35 percent of the borrower’s gross monthly income.

Although Apple Pay Later’s maximum loan is $1,000, the service does not screen borrowers for income.

91����ԭ�� contacted Apple for comment on its plans in the three states above, but had not received a reply at the time of publication.