Mastercard is jumping into the competitive installment loan space by allowing banks and start-ups to ramp up their own “buy now, pay later” offers.
The payments giant announced a new program called “Mastercard Installments” for U.S., Australian and U.K. markets on Tuesday, which will go live in the first quarter of next year. The increasingly popular lending style lets buyers split up purchases through monthly, often interest-free payments.
Mastercard doesn’t lend directly to customers. Its network acts as a middle man in the payment process for credit and debit cards. In this case, it will enable banks and fintechs to “plug in” to the Mastercard program and offer loans directly.
Barclays U.S. consumer bank, SoFi, Synchrony and Marqeta are among those that said they plan to use Mastercard for rolling out installment loans.
“Consumers are demonstrating a high level of interest in this buy now, pay later capability,” Craig Vosburg, chief product officer at Mastercard, said in a phone interview. “It uses the power of the Mastercard network and franchise to bring this to market at scale.”
New research from The Strawhecker Group analyzes key trends and consumer attitudes.
Download a free infographic covering several findings from the full report.
Consumers have increasingly adopted Buy Now, Pay Later (BNPL) services for multiple reasons; a desire for financial flexibility, a way to avoid incurring credit card debt, or to purchase items outside of their budgets. However, despite its popularity, consumer debt and missed payments have led to calls for additional research and regulation. Read the press release.
To take a closer look, The Strawhecker Group (TSG) conducted a survey of over 1,500 U.S. consumers in early 2021 with the goal of understanding domestic attitudes and perspectives on the use of BNPL services. The complete findings, a selection of BNPL provider profiles, and market landscape details can be found in the firm’s new report Buy Now, Pay Later: An Analysis of Key Trends and Consumer Attitudes.
Highlights of this extensive 81-page report include:
- Buy Now, Pay Later Background
- Key Players in the Buy Now, Pay Later Space
- Buy Now, Pay Later Consumer Survey
- Concluding Thoughts: The Future of Buy Now, Pay Later