Mastercard unveiled on Tuesday a buy now, pay later (BNPL) program that will allow consumers to pay for online and in-store purchases through equal and interest-free installments.
According to the business, the Mastercard Installments programme will be offered in markets around the United States, the United Kingdom, and Australia.
Mastercard claims that its Installments programme builds on the company’s open banking efforts, which allow customers, merchants, and lenders have a straightforward and easy experience.
With consumer agreement, account-level transaction histories can be examined as part of the screening process as an optional option for lenders, allowing credit to be safely given to a larger number of consumers. The consumer’s preferred form of payback, which might be a checking or savings account, a Mastercard debit card, or another payment product, is also made possible by open banking technology.
Key benefits of Mastercard Installments include:
- Consumers: The Mastercard Installments program enables consumers to choose how and when they pay for items from a brand they can trust. Consumers enjoy a seamless experience before and after checkout through options to access BNPL offers, or secure an offer at the time of checkout, from trusted lenders for use at a variety of merchants interest-free. As consumer protection is paramount at Mastercard, Mastercard Installments provides ubiquitous acceptance backed by zero liability fraud protection, not yet available through most current BNPL offerings.
- Merchants & Acquiring Banks: The Mastercard Installments program helps merchants scale BNPL offerings to consumers to turn convenience into a competitive advantage. BNPL solutions have been shown to increase average sales by 45 percent and reduce cart abandonment by 35 percent post-implementation*. Mastercard Installments provides seamless merchant integration with a streamlined process for millions of merchants who already accept Mastercard. Meanwhile, acquiring banks can offer installments capabilities to their entire merchant base with minimal, simple integration.
- Lenders: Through the Mastercard Installments Program, lenders can offer a flexible, seamless BNPL experience to both existing and new customers, expanding their lending opportunities in one of the fastest growing consumer segments. Mastercard Installments provides an expedited time to market and global expansion opportunities with a responsible lending approach.
- Wallets and BNPL players: Digital wallets and BNPL players can easily integrate Mastercard Installments’ APIs and deploy the solution to consumers and already integrated merchants, extending reach beyond their existing footprint. Mastercard Installments is embedded in the core Mastercard network, which means there is no longer a need for wallets and BNPL players to build direct settlement arrangements with merchants or acquirers. BNPL providers can also supplement their existing networks with additional merchant acceptance.
Fueled by changing consumer spending habits during the pandemic, BNPL adoption continues to accelerate globally. In addition to consumer demand, the momentum is being driven by issuer and merchant desire to deliver new, complementary ways for consumers to shop both in-store and online.
The company also said it will work on the BNPL program with banks and fintech firms, including Barclays’s U.S. unit, Fifth Third Bancorp, Marqeta, and SoFi Technologies, in the United States, and Qantas Loyalty and Latitude in Australia.