The payment giant’s new ‘buy now, pay later’ service, Mastercard Installments, will be available to consumers in the US, UK and Australia.
Mastercard is launching a ‘buy now, pay later’ (BNPL) service to customers in the UK, US and Australia.
Mastercard Installments will be made available to meet growing consumer demand, according to the payments company. It will enable banks, lenders, fintechs and wallets to offer flexible instalment options to consumers.
“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 at 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.”
The company is joining an increasingly crowded BNPL market. Swedish BNPL giant Klarna became Europe’s most valuable start-up earlier this year, and UK digital bank Monzo recently jumped on the trend with its latest feature, Monzo Flex.
Big names are also turning to acquisitions to get into the market. PayPal acquired Japanese BNPL Paidy earlier this month and Jack Dorsey’s Square snapped up Afterpay’s BNPL service in a $29bn deal in August. Goldman Sachs recently purchased a slice of the action too, acquiring BNPL service GreenSky for €2.24bn.
Mastercard has promised to protect consumers by offering zero-liability fraud protection. The company is working with Barclays US, Fifth Third, FIS, Galileo, Huntington, Marqeta, SoFi and Synchrony in the US, and with Qantas Loyalty and Latitude in Australia. It has plans to roll the service out to customers in more locations in the future.
Ahmed Fahour, MD and CEO of Latitude Financial, commented: “Through our longstanding 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.”
Vicky Bindra, chief product officer at FIS, added: “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.”
According to FIS Worldpay, the $60bn BNPL market represented 2.6pc of global e-commerce in 2019, excluding China. The company estimated that soon BNPL could represent 5pc of global e-commerce outside of China.
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