Payment tech giant Mastercard is entering the “buy now, pay later” market, as it plans to roll out its new Mastercard Installments program. The new program will provide lenders, banks, digital wallet providers, and fintech firms with with ability to offer BNPL options at retailers.
Flexibility and Speed
The new product will allow consumers the flexibility to pay in-store or online through equal, interest-free installments, with Mastercard’s seamless integration. The pay-in-four model also doesn’t need to be integrated into the merchant infrastructure.
To avail the BNPL offers on Mastercard Installments, users can either opt for pre-approval through the mobile banking app of their lender, or for instant approvals when they checkout. The former are available on the retailer’s website, and can be stored in digital wallets like Mastercard Click-to-Pay. This can then be directed towards online or in-store payments, provided Mastercard is accepted.
Click-to-Pay will start hosting instant approvals shortly after they are launched. With the same, consumers will be able to get full transparency on lender practices during the approval process, allowing for zero-liability fraud protection, as well the provision to challenge any unrecognized charges.
A Growing Industry
BNPL is seeing a major growth in recent times, with more and more customers opting for the same, owing mainly to the ease. Juniper Research recently carried out a study into the sector, and found that spending through BNPL services, including flexible credit accounts and fixed installment plans, will hit $995 billion by 2026, rising significantly from $266 billion that it currently stands at. This increase could account for more than 24 percent of global e-commerce transactions related to physical goods.
And that’s not all, as a different set of data, this time by eMarketer, asserts that 45.1 million US consumers who are aged 14 or older, will be using a BNPL platform this year, an 81.2 percent year-on-year. By 2025, these stats are expected to grow by more than 33 percent.
Trust and Security
As such, it’s not really surprising that retailers are flocking towards the system, and partnering with BNPL providers. Mastercard Installments, for example, will be working with Barclays US, FIS, Fifth Third, Huntington, SoFi, Galileo, Marqeta, and Synchrony, when it gets launched in the United States, the United Kingdom, and Australia (where it will collaborate with Qantas Loyalty and Latitude).
The company’s chief product officer, Craig Vosburg, has said that the aim of providing the new service is to allow consumers to get more flexibility, while protecting consumers without “sacrificing trust and security.”