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.”