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September 29, 2021

Mastercard forays into BNPL space with new offering

By Shalini mani

Mastercard is set to tap the evolving Buy Now, Pay Later (BNPL) market with the launch of its latest offering, Mastercard Installments in the US, the UK and Australia.

Free Report
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What does the future hold for BNPL market?

The global Buy Now Pay Later (BNPL) market is estimated at a massive $120 million in 2021 – representing just less than 3% of the global ecommerce market. Yet the user-base is massive, with leading provider, Klarna, alone reportedly having 87 million users in 2021. This market is only expected to grow, with established companies like Apple and Goldman Sachs moving into the BNPL sector in bids to capitalize on this trend. To help you make the most of this growing market, GlobalData’s Buy Now Pay Later in 2022 and Beyond report provides detailed insight into the BNPL sector. This report:
  • Discusses the disruptive potential of the BNPL sector on the payments industry
  • Identifies the leading companies that are driving sector growth and the benefits this new payments solution provides to both merchants and consumers
  • Analyzes the consumer’s risk of using BNPL loans and government attempts at introducing regulations to the sector
  • Uncovers the main risks that consumers expose themselves to when borrowing with BNPL
Download this free report to get to know where this developing market is headed, and how you can reshape your strategies.
by GlobalData
Enter your details here to receive your free Report.

The move is anticipated to challenge the dominance of BNPL players such as Klarna, Afterpay, Zip, and Sezzle.

Mastercard Installments, which will be available both in-store and online, aims to help lenders, fintechs, and wallets extend a range of flexible instalment options to consumers.

These include a zero percent interest as well as pay-in-four mode, stated the card giant.

It will also allow shoppers to digitally avail BNPL offers, either pre-approved through their mobile banking app or through instant approval at the time of checkout.

They will be able to use pre-approved instalments directly on a merchant’s website.

Besides, they will be able to store them in digital wallets such as Click-to-Pay. These can be later used both online and in-store anywhere Mastercard is accepted.

Leveraging Mastercard’s multi-rail network, the new service will offer access to APIs that will facilitate features including installment calculation and multiple repayment options.

Mastercard chief product officer Craig Vosburg said: “Mastercard Installments has been built on our guiding principles to protect consumers and enable choice without sacrificing trust and security.

“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.”

Mastercard is working with Barclays US, Fifth Third, FIS, Galileo, Huntington, Marqeta, SoFi, and Synchrony for the launch of Mastercard Installments in the US.

In Australia, the company has teamed up with Qantas Loyalty and Latitude.

Commenting on the development, Barclays US Consumer Bank CEO Denny Nealon said: “Mastercard Installments leverages the full power and reach of the Mastercard Network and will complement the highly-customised credit and lending solutions we offer to our partners that drive their businesses forward while delighting their customers.”

Recent entrants

As demand for the BNPL service continues to grow globally, a slew of banks and fintech firms have entered the market.

Earlier this month, UK-based fintech Curve set foot in the BNPL segment with its offering called Curve Flex.

Reuters recently reported that Capital One Financial is preparing to pilot a BNPL product this year.

Last month, Citi Australia announced plans to launch its BNPL product, Spot. Buy Now Pay Later.

Meanwhile, existing BNPL players have been rapidly expanding their operations to take advantage of the accelerating BNPL adoption worldwide.

Last week, Australia’s Zip made a strategic move into the Indian BNPL space with a $50m investment in fintech firm ZestMoney.

Free Report
img

What does the future hold for BNPL market?

The global Buy Now Pay Later (BNPL) market is estimated at a massive $120 million in 2021 – representing just less than 3% of the global ecommerce market. Yet the user-base is massive, with leading provider, Klarna, alone reportedly having 87 million users in 2021. This market is only expected to grow, with established companies like Apple and Goldman Sachs moving into the BNPL sector in bids to capitalize on this trend. To help you make the most of this growing market, GlobalData’s Buy Now Pay Later in 2022 and Beyond report provides detailed insight into the BNPL sector. This report:
  • Discusses the disruptive potential of the BNPL sector on the payments industry
  • Identifies the leading companies that are driving sector growth and the benefits this new payments solution provides to both merchants and consumers
  • Analyzes the consumer’s risk of using BNPL loans and government attempts at introducing regulations to the sector
  • Uncovers the main risks that consumers expose themselves to when borrowing with BNPL
Download this free report to get to know where this developing market is headed, and how you can reshape your strategies.
by GlobalData
Enter your details here to receive your free Report.

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