In an attempt to meet the fast growing global consumer demand for flexible, Mastercard has unveiled Mastercard Installments, a unique and innovative Buy Now Pay Later (BNPL) program that delivers greater choice at checkout, both in the store and online shops.
Mastercard Installments uses the power of the company’s trusted network to make Buy Now Pay Later available to millions of consumers and merchants worldwide.
It enables banks, lenders, fintechs, and wallets among others to offer a large variety of flexible installment options to consumers including a zero percent interest rate.
Mastercard Installments to disrupt the BNPL industry
The Pay-in-four model, without onerous integration into the merchant infrastructure allows them to quickly offer secure and competitive BNPL experiences at scale.
Mastercard Installments enables consumers to digitally access BNPL offers, either pre-approved through their lender’s mobile banking app or through instant approval during checkout.
Pre-approved installments are used on a merchant’s website, and be stored in digital wallets including Click-to-Pay, to then be used online or in-store wherever Mastercard is accepted.
Instant approvals during checkout will be available through Click-to-Pay shortly after launch. Consumers will have full transparency on lender practices up-front during the approval process.
“Unlike current BNPL offerings, consumers benefit from fraud protection, ability to challenge unrecognized charges and peace of mind that comes with Mastercard’s acceptance footprint.”
“Payments come down to choice and people want more from their money with greater flexibility and control in paying wherever they shop,” said Craig Vosburg, CPO at Mastercard.
Mastercard Installments has been built on our guiding principles to protect consumers and merchants and enable choices without sacrificing trust and security.
It is a digital-focused way to pay today and tomorrow, delivered through consumer’s most trusted relationships with their banks and other lenders, to merchants of their choice.
Mastercard Installments builds on Mastercard’s investments in open banking that help deliver a simple and convenient experience for consumers, merchants and lenders.
As an option for lenders, with consumer consent, account-level transaction histories are considered part of the underwriting process, enabling credit to be extended to many shoppers.
Open banking technology facilitates the consumer’s preferred method of repayment, which is their checking or savings account, a Mastercard debit card, or another payment product.
Key benefits of harnessing Mastercard Installments
For consumers, the Mastercard Installment program enables consumers to choose how and when they pay for items from a brand they can trust.
Consumers enjoy before and after checkout through options to access BNPL offers or secure an offer at time of checkout, from trusted lenders for use at merchants interest free.
Consumer protection is paramount, Mastercard Installments provide ubiquitous acceptance backed by zero liability fraud protection, not available through most current BNPL offerings.
For merchants and 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 offer a flexible, seamless BNPL experience to 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.
Digital wallets and BNPL players integrate Mastercard Installments’ APIs and deploy solution to consumers and integrated merchants, extending reach beyond existing footprint.
Mastercard Installments is embedded in the core Mastercard network, and there is no need for wallets and BNPL players to build settlement arrangements with merchants or acquirers.
BNPL providers can also supplement their networks with additional merchant acceptance.
Fueled by changing consumer spending habits, 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.
Mastercard Installments will also provide access and support to a new suite of Application Programming Interfaces to power each step of the Buy Now Pay Later journey.
Installment calculation and multiple repayment options are all delivered securely and at a global scale through the Mastercard multi-rail network developed by Mastercard Developers.
Mastercard taps key partners in the U.S.A and Australia
Mastercard Installments will be on market in the U.S, Australia, and UK.
Mastercard is working closely with partners Barclays US, Fifth Third, FIS, Galileo, Huntington, Marqeta, SoFi, Synchrony and with Qantas Loyalty and Latitude in Australia.
Mastercard is attempting to facilitate and support its customers across the globe to offer the Mastercard Installments solution program, with plans for other international markets.
Denny Nealon, Chief Executive Officer at Barclays US Consumer Bank said, “Barclays US Consumer Bank is excited to partner with Mastercard as it introduces its new BNPL solution.”
“Our ambition to be the premier choice for America’s best brands hinges on our ability to deliver a full suite of products that meet and exceed the needs of our partners and customers.”
“Mastercard Installments leverages the power and reach of the Mastercard Network and complements the highly-customized credit and lending solutions we offer to our partners.”
Howard Hammond, Executive VP and Head of Consumer Banking at Fifth Third Bank said, “We are excited to see Mastercard bring an innovative BNPL solution to the market.”
“This new Mastercard Installments program from Mastercard meets the growing demand for flexible options both at the checkout and also online.”
Vicky Bindra, C.P.O, FIS said, “BNPL is one of the fastest growing alternative payment models globally, it is transforming traditional purchasing experience for consumers and merchants.”
“The rapid growth of BNPL is rooted in choice, flexibility and expediency shoppers get. We are delighted to partner with Mastercard to provide pioneering services to all customers.”
“This collaboration will spearhead further innovation, making BNPL more accessible to merchants and consumers, while driving confidence and trust across the ecosystem.”
Amit Dhingra, Retail Payments and Consumer Lending Director, Huntington National Bank said, “We are pleased to see Mastercard continue to develop innovative payment features.”
“This Buy Now Pay Later for consumers and merchants recognizes the need for customers to have greater choice and flexibility in new and different ways to manage their finances.”
Ahmed Fahour, M.D and CEO, Latitude Financial said, “Through our long-standing partnership, Latitude is looking to work with Mastercard to bring BNPL payment solutions in Australia.”
Salman Syed, SVP/GM North America at Marqeta said, “Mastercard has taken a forward approach to enabling the Buy Now Pay Later ecosystem with their new Installment Program.”
“It allows Buy Now Pay Later providers and financial institutions access to a merchant network infrastructure that encompasses anywhere Mastercard is accepted. “
“There are possibilities for new innovation by combining Mastercard Installments with Marqeta’s card issuing platform and this is an attractive proposition for banks and fintechs.”
Anthony Noto, CEO of SoFi said, “We are a digital personal finance company with passion to help people by bringing products and features that meet their wants and needs.”
“The demand for a new way to pay via BNPL within a debit account like SoFi Money is clear; SoFi is thrilled to be deepening its partnership with Mastercard to bring this technology to life.”
Michael Bopp, C.G.O at Synchrony said, “Mastercard’s enablement of BNPL across their network will further empower everyone with access to variety of payment options.”
“We are committed to providing our partners and customers with choice, flexibility and long-term value, and look forward to explore ways we collaborate with Mastercard in this endeavor.”
