To The Moon

As an avid follower of $Apple(AAPL)$, I’ve closely watched the company’s strategic moves and their impact on the market. Apple surprised many this week by announcing the discontinuation of their "Buy Now, Pay Later" program, Apple Pay Later, in the US. While the stock market seems bullish on AAPL, with the chart indicating a potential price surge, this news leaves me wondering about the true motivations behind Apple's decision.

Apple to discontinue 'buy now, pay later' service in US as it plans new loan program

Launched just last year, Apple Pay Later allowed users to split purchases up to $1,000 into four interest-free installments. While seemingly convenient, it appears Apple has decided to abandon this foray into consumer lending. The official reason given is a shift towards offering installment loans through third-party lenders and credit cards within the Apple Pay platform.

This move by Apple feels like a strategic retreat. Perhaps they weren't comfortable venturing into the messy world of debt collection, a stark contrast to their focus on secure and private payments within the Apple Pay ecosystem. By outsourcing the financial aspects to established lenders, Apple can avoid the potential headaches associated with loan defaults and delinquencies.

The spokesperson from Apple mentioned, “Starting later this year, users across the globe will be able to access installment loans offered through credit and debit cards, as well as lenders, when checking out with Apple Pay.” This global approach expands the availability of installment plans beyond the U.S., offering more flexibility and options to consumers worldwide.

This shift to third-party lenders actually benefits both Apple and consumers. Users will have access to a wider range of installment loan options through Apple Pay, potentially with varying terms and interest rates. For Apple, this eliminates the risk associated with issuing loans themselves, allowing them to focus on their core competencies: selling devices and facilitating secure transactions.

AAPL Daily Chart

The discontinuation of Apple Pay Later shouldn't be seen as a negative for Apple. In fact, the strong price breakout from the ascending channel in the chart suggests continued investor confidence. This strategic pivot towards third-party lenders could streamline Apple Pay and make it a more attractive platform for both consumers and financial institutions.

While the reasons behind Apple's decision remain somewhat opaque, it appears to be a calculated move to minimize risk and maximize the potential of Apple Pay. This, coupled with the current bullish sentiment in the market, makes AAPL an interesting stock to watch in the coming months.

What are your thoughts on Apple’s decision to discontinue Apple Pay Later? Do you think this move will positively impact their long-term strategy and stock performance?

Disclaimer: This is not financial advice. Do your own research before making any investment decisions.