As consumer demand for installment payments continues to grow and has spiked throughout the pandemic, Mastercard has entered the market.
The banking giant has confirmed it will enter the Buy Now, Pay Later (BNPL) programme that delivers greater choice at checkout, both in-store and online.
Craig Vosburg, Chief Product Officer, Mastercard, commented on the move: “At the heart of it, payments come down to choice – and people want more from their money with greater flexibility and control in how they pay and where they shop.
“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 Installments utilises the company’s trusted network to make BNPL available to millions of consumers and merchants worldwide. It enables banks, lenders, fintechs, and wallets to offer a variety of flexible installment options to consumers – including a zero percent interest, pay-in-four model – without onerous integration into the merchant infrastructure, allowing them to quickly offer secure and competitive BNPL experiences at scale.
The offering 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 can be used directly on a merchant’s website, and can be stored in digital wallets including Click-to-Pay, to then be used online or in-store wherever Mastercard is accepted.
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.
Mastercard Installments will also provide access and support to a new suite of APIs to power each step of the BNPL journey; from installment calculation to multiple repayment options, all delivered securely and at a global scale through the Mastercard multi-rail network. Learn more on Mastercard Developers.
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 elective option for lenders, with consumer consent, account-level transaction histories can be considered as part of the underwriting process, enabling credit to be safely extended to a greater number of shoppers.
Open banking technology also facilitates the consumer’s preferred method of repayment, which may be their checking or savings account, a Mastercard debit card, or another payment product.
Anthony Noto, CEO of SoFi, added: “As a digital personal finance company with a passion to help people get their money right, we pride ourselves on bringing products and features that meet our members’ wants and needs when it comes to saving, spending, and borrowing money.
“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.”