Mastercard enters the BNPL market

Australia is among the three markets where Mastercard plans to first launch its new buy now, pay later (BNPL) program.

Called Mastercard Installments, it will also be launched in the US and UK. It plans to scale to other markets in the future.

Mastercard is working with Qantas Loyalty and Latitude to launch the product in Australia.

Ahmed Fahour, managing director and CEO at Latitude Financial, says: “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.

Mastercard Installments enables banks, lenders, fintechs and wallets to offer a variety of flexible instalment options to consumers, including a zero per cent interest, pay-in-four model.

Consumers will continue to benefit from zero liability fraud protection and the ability to challenge unrecognised charges.

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 per cent and reduce cart abandonment by 35 per cent post-implementation.

The product provides seamless merchant integration with a streamlined process for millions of merchants who already accept Mastercard. Meanwhile, acquiring banks can offer instalments capabilities to their entire merchant base with minimal, simple integration.

In addition, 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.

The product 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.

Mastercard says the product will also provide access and support to a new suite of APIs to power each step of the BNPL journey – from instalment calculation to multiple repayment options, all delivered securely and at a global scale through the Mastercard multi-rail network. Learn more on Mastercard Developers.

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