Mastercard Announces “Mastercard Installments” BNPL Program
Mastercard is getting in on the financing craze. This week, the company announced that Mastercard Installments will soon debut in the United States, Australia, and the United Kingdom. The new feature will enable banks, FinTechs, and others to offer “buy now, pay later” options to customers. Specifically, the company notes that Installments will take on a 0% interest, pay-in-four model akin to those used by Afterpay, Klarna, and others. To start, Mastercard will be working with Barclays, Huntington, SoFi, and Synchrony among others in the U.S. as well as Qantas Loyalty and Latitude in Australia.
In a press release, Mastercard explains that lenders can either offer Installments via pre-approval or enable instant approval at checkout. With pre-approvals, platforms can offer digital cards to consumers to use wherever Mastercard is accepted. Meanwhile, instant approvals will utilize Click-to-Pay, but this feature will debut shortly after Installments launches.
The announcement from Mastercard comes as FinTechs, banks, and others rush into the exploring BNPL space. Last week, Goldman Sachs revealed plans to acquire the platform GreenSky for approximately $2.24 billion. In a much larger deal, Square is purchasing the popular and aforementioned BNPL Afterpay for around $29 billion.
Commenting on the advent of Installments and BNPL in general, 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.” He continued, “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.”
Elsewhere, SoFi CEO Anthony Noto said of the offering, “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.”
If it weren’t already obvious, Mastercard’s announcement reinforces the fact that buy now, pay later is the hot trend in finance. While several companies are rushing to acquire existing BNPL platforms, Installments blows the door open to even more competition in the space. This will certainly make for an interesting few months ahead as the craze continues.