BNPL market gets new big player as Mastercard launches Installments

Mastercard has entered the buy now, pay later (BNPL) market after it unveiled flexible payment platform Installments in the US, the UK and Australia.

According to Mastercard, Installments uses the power of the company’s trusted network to make BNPL available to millions of consumers and merchants globally.

The service will allow banks, FinTechs, lenders and wallets to provide a range of flexible instalment options to consumers, including a 0% interest, pay-in-four model, without the need to integrate into the infrastructure of the merchant.

Installments will allow consumers to digitally access BNPL offers – either pre-approved through their lender’s mobile banking app or through instant approval at checkout. Pre-approved Installments will be able to be used directly on the website of a merchant and can be stored in digital wallets to be then used online or in-store wherever Mastercard is accepted.

Mastercard highlighted that Installments will also come with protection in the form of zero liability fraud protection – something not currently common in BNPL platforms – as well as the ability to challenge unrecognised charges.

Installments will provide simple merchant integration for the millions of merchants who already accept Mastercard, while acquiring banks can offer Installments capabilities to their entire merchant base through the integration process.

The BNPL service is embedded into the core Mastercard network, which will mean there will not be a need for wallets and BNPL companies to build direct settlement arrangements with merchants or acquirers.

Mastercard is working alongside Barclays US, FIS, Galileo, Huntington, Marqueta, SoFi, Fifth Third and Synchrony in the US and Qantas Loyalty and Latitude in Australia.

The company noted it was committed to supporting its customers across the globe to offer the Mastercard Installments program, with plans to introduce the service to other markets in the future.

Mastercard chief product officer Craig Vosburg said, “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.”

Barclays US Consumer Bank CEO Denny Nealon added, “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 full power and reach of the Mastercard Network and will complement the highly-customized credit and lending solutions we offer to our partners that drive their businesses forward while delighting their customers.”

A recent report by Allied Market Research projected that the BNPL market will generate $3.98trn by 2030 and record a CAGR of 45.7% from 2021 to 2030.

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