PURCHASE, N.Y.--(BUSINESS WIRE)--To meet growing consumer demand for flexible, digital-first payment options, Mastercard today unveiled Mastercard Installments, a unique and innovative Buy Now, Pay Later (BNPL) program that delivers greater choice at checkout, both in-store and online.
Mastercard Installments uses the power of 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.
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 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. 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, and unlike most current BNPL offerings, consumers will continue to benefit from zero liability fraud protection, the ability to challenge unrecognized charges, and the peace of mind that comes with Mastercard’s acceptance footprint.
“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,” said Craig Vosburg, Chief Product Officer, Mastercard. “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 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.
Key benefits of Mastercard Installments include:
Consumers: The Mastercard Installments program enables consumers to choose how and when they pay for items from a brand they can trust. Consumers enjoy a seamless experience before and after checkout through options to access BNPL offers, or secure an offer at the time of checkout, from trusted lenders for use at a variety of merchants interest-free. As consumer protection is paramount at Mastercard, Mastercard Installments provides ubiquitous acceptance backed by zero liability fraud protection, not yet available through most current BNPL offerings.
Merchants & 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: Through the Mastercard Installments Program, lenders can offer a flexible, seamless BNPL experience to both 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.
Wallets and BNPL players: Digital wallets and BNPL players can easily integrate Mastercard Installments’ APIs and deploy the solution to consumers and already integrated merchants, extending reach beyond their existing footprint. Mastercard Installments is embedded in the core Mastercard network, which means there is no longer a need for wallets and BNPL players to build direct settlement arrangements with merchants or acquirers. BNPL providers can also supplement their existing networks with additional merchant acceptance.
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 Taps Key Partners in the U.S. and Australia
Mastercard Installments will first come to market in the United States, Australia, and the United Kingdom (UK). Mastercard is working with Barclays US, Fifth Third, FIS, Galileo, Huntington, Marqeta, SoFi, and Synchrony in the U.S., and with Qantas Loyalty and Latitude in Australia. Mastercard is committed to supporting its customers across the globe to offer the Mastercard Installments program, with plans to scale to other markets in the future.
Denny Nealon, CEO, 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 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.”
Howard Hammond, Executive Vice President and Head of Consumer Banking at Fifth Third Bank said, “We are excited to see Mastercard bring this BNPL solution to the market to provide customers more choices and ease concerns about payment. This new Mastercard Installments program meets the growing demand for flexible options both at the checkout and online.”
Vicky Bindra, Chief Product Officer, FIS said, “BNPL is one of the fastest growing alternative payment models globally - it is transforming the traditional purchasing experience for both consumers and merchants. The rapid growth of BNPL is rooted in the choice, flexibility and expediency it gives shoppers. We are delighted to partner with Mastercard to provide pioneering services to new and existing customers; this collaboration will spearhead further innovation in the space, making BNPL more accessible to merchants and consumers, while driving confidence and trust across the ecosystem to bring increased adoption.”
Amit Dhingra, Retail Payments and Consumer Lending Director, Huntington National Bank said, “We are pleased to see Mastercard continue to develop innovative payment features, like Buy Now, Pay Later for consumers and merchants. We recognize the need for customers to have greater choice and flexibility in new and different ways to manage their finances.”
Ahmed Fahour, Managing Director and Chief Executive Officer, Latitude Financial said, “Through our long-standing partnership, Latitude is looking forward to working with Mastercard to bring new BNPL payment solutions to life in Australia, benefiting merchants and providing customers with a superior shopping experience.”
Salman Syed, SVP/GM North America at Marqeta said, “Mastercard has taken a forward-thinking approach to enabling the Buy Now, Pay Later ecosystem with their new Installment Program. It allows BNPL providers and financial institutions access to a merchant network that encompasses anywhere Mastercard is accepted, and Mastercard has done the hard work of building out the network infrastructure to support that. We’re excited about the possibilities for new innovation opened up by combining Mastercard Installments with Marqeta’s modern card issuing platform and see this being an attractive proposition for banks and fintechs alike.”
Anthony Noto, CEO of SoFi said, “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.”
Michael Bopp, Chief Growth Officer at Synchrony said, “Mastercard’s enablement of BNPL offerings across their network will further empower merchants and consumers with access to a greater variety of payment options. We are committed to providing our partners and customers with choice, flexibility and long-term value, and we look forward to exploring ways we can collaborate with Mastercard in this endeavor.”
About Mastercard (NYSE: MA), www.mastercard.com
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart, and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our company. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.
*Source: Study conducted using Mastercard transaction data; October 2020
SoFi Money® is a cash management account, which is a brokerage product, offered by SoFi Securities LLC. Member FINRA/SIPC. Neither SoFi nor its affiliates are a bank.