Mastercard on Tuesday unveiled a buy now, pay later (BNPL) program that will allow consumers to pay for their purchases online and in-store in equal, interest-free installments.
The Mastercard payout program will be available in markets in the United States, United Kingdom and Australia, the company said.
Mastercard says its installment program builds on Mastercard’s investments in open banking services that help provide a simple and convenient experience for consumers, merchants and lenders.
As an optional option for lenders, with consumer consent, account-level transaction history can be viewed as part of the underwriting process, allowing credit to be securely extended to more people. buyers. Open banking technology also facilitates a consumer’s preferred method of repayment, which may be their checking or savings account, a Mastercard debit card, or some other payment product.
The main advantages of Mastercard payments include:
- Consumers: The Mastercard Payout Program allows consumers to choose how and when to pay for branded items they can trust. Consumers get a seamless before and after payment experience with options to access BNPL offers, or get an offer at the time of payment, from trusted lenders for interest-free use at a variety of merchants. As consumer protection is paramount at Mastercard, Mastercard payouts offer ubiquitous acceptance backed by zero liability fraud protection, which is not yet available in most current BNPL offerings.
- Merchants and acquiring banks: The Mastercard Payout Program helps merchants tailor BNPL offerings to consumers to turn convenience into competitive advantage. BNPL solutions have been shown to increase average sales by 45% and reduce cart abandonment by 35% after implementation *. Mastercard Payments provide seamless integration for merchants with a streamlined process for millions of merchants who already accept Mastercard. Meanwhile, acquiring banks can offer disbursement capabilities to their entire merchant base with simple and minimal integration.
- Lenders: Through the Mastercard Installment Program, lenders can deliver a flexible and seamless BNPL experience to existing and new customers, expanding their lending opportunities in one of the fastest growing consumer segments. Mastercard Payments offer an accelerated time to market and opportunities for global expansion with a responsible lending approach.
- BNPL wallets and readers: Digital BNPL wallets and players can easily integrate Mastercard Payments APIs and deploy the solution to already integrated consumers and merchants, extending their reach beyond their existing footprint. Mastercard payments are integrated into the heart of the Mastercard network, which means that BNPL wallets and players no longer need to enter into direct settlement agreements with merchants or acquirers. BNPL providers can also supplement their existing networks with additional merchant acceptance.
Fueled by changing consumer habits during the pandemic, BNPL adoption continues to accelerate globally. In addition to consumer demand, momentum is fueled by the desire of issuers and merchants to provide consumers with new and complementary ways to shop in-store and online.
The company also said it will work on the BNPL program with banks and fintech companies, including the US unit of Barclays, Fifth Third Bancorp, Marqeta and SoFi Technologies in the US, and Qantas Loyalty and Latitude. in Australia.
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