In the last few years, when shopping online, you may have noticed the addition of a new way to pay beyond the traditional options like a credit card, PayPal, or store-specific credit. That would be short-term installment loan plans deducted automatically from your provided bank account, usually from companies like Affirm, Klarna, or SplitIt. In the form that's promoted most strongly, these companies allow you to divide a purchase into a few installments, generally auto-deducted every two-to-four weeks, often with no APR. If you don't trust yourself to pay off a zero percent APR loan during the promotional period but want some kind of access to an installment plan with a comparable interest rate, then the automatic nature could be pretty attractive.

In March 2023, Apple launched its own version of the short-term installment loan model, Apple Pay Later on a limited basis and made it widely available to all U.S.-based iPhone and iPad users the following October. The implementation was pretty familiar, four payments over a six-week period covering purchases up to $1,000. A big name like Apple that already had its own "wallet" ecosystem made plenty of sense to enter that space, but there's been a hiccup. In June 2024, Apple told 9to5Mac that Apple Pay Later is being phased out, albeit with an important caveat. How and why? Read on to find out.