Mastercard is set to tap the evolving Buy Now, Pay Later (BNPL) market with the launch of its latest offering, Mastercard Installments in the US, the UK and Australia.
The move is anticipated to challenge the dominance of BNPL players such as Klarna, Afterpay, Zip, and Sezzle.
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By GlobalDataMastercard Installments, which will be available both in-store and online, aims to help lenders, fintechs, and wallets extend a range of flexible instalment options to consumers.
These include a zero percent interest as well as pay-in-four mode, stated the card giant.
It will also allow shoppers to digitally avail BNPL offers, either pre-approved through their mobile banking app or through instant approval at the time of checkout.
They will be able to use pre-approved instalments directly on a merchant’s website.
Besides, they will be able to store them in digital wallets such as Click-to-Pay. These can be later used both online and in-store anywhere Mastercard is accepted.
Leveraging Mastercard’s multi-rail network, the new service will offer access to APIs that will facilitate features including installment calculation and multiple repayment options.
Mastercard chief product officer Craig Vosburg said: “Mastercard Installments has been built on our guiding principles to protect consumers and enable choice 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, at merchants of their choice.”
Mastercard is working with Barclays US, Fifth Third, FIS, Galileo, Huntington, Marqeta, SoFi, and Synchrony for the launch of Mastercard Installments in the US.
In Australia, the company has teamed up with Qantas Loyalty and Latitude.
Commenting on the development, Barclays US Consumer Bank CEO Denny Nealon said: “Mastercard Installments leverages the full power and reach of the Mastercard Network and will complement the highly-customised credit and lending solutions we offer to our partners that drive their businesses forward while delighting their customers.”
Recent entrants
As demand for the BNPL service continues to grow globally, a slew of banks and fintech firms have entered the market.
Earlier this month, UK-based fintech Curve set foot in the BNPL segment with its offering called Curve Flex.
Reuters recently reported that Capital One Financial is preparing to pilot a BNPL product this year.
Last month, Citi Australia announced plans to launch its BNPL product, Spot. Buy Now Pay Later.
Meanwhile, existing BNPL players have been rapidly expanding their operations to take advantage of the accelerating BNPL adoption worldwide.
Last week, Australia’s Zip made a strategic move into the Indian BNPL space with a $50m investment in fintech firm ZestMoney.
