ROOT
Mastercard flexes with build-a-BNPL program
Consumer finance’s latest disruption is set to be integrated by the infrastructure of one of the largest players.
Mastercard flexes with build-a-BNPL program
Consumer finance’s latest disruption is set to be integrated by the infrastructure of one of the largest players.
Mastercard is making its move into the buy now, pay later (BNPL) battleground, but those expecting a direct rival to market leaders like Afterpay and Zip might be disappointed.
Instead, the payments processing company is opting to launch a program that promises to help banks, lenders, fintechs and wallets to launch their own bespoke BNPL offerings via Mastercard’s payments processing infrastructure.
Lenders will have a number of different instalment options to choose from, including 0 per cent interest and pay-in-four. Mastercard has said that they’ll even allow retailers to add a surcharge.
Essentially, the program will allow both traditional banks and more cutting-edge players in the fintech and digital wallets space to design and deploy their own BNPL products and services at scale.
Mastercard Installments will initially launch in Australia, the United States and the United Kingdom before expanding elsewhere.
Commenting on the news, Mastercard division president for Australasia Richard Wormald said that Australians have always valued greater choice, security and convenience in the way they pay, “so it’s no surprise that the country has been at the forefront of BNPL innovation”.
He said that Mastercard Installments builds on these foundations by enabling local banks, lenders, fintechs and merchants to customise their own BNPL model and provide customers with new ways to pay both in-store and online.
As opposed to many existing BNPL solutions, Mastercard Installments has two key advantages.
The first is scale. As it’s built atop the credit card giant’s existing payments processing infrastructure, it’ll be supported everywhere Mastercard already is. Mastercard won’t have to win over merchants when it comes to adding another way to pay, because they probably already support it.
The other benefit that Mastercard is promising will differentiate Mastercard Installments from the rest of the BNPL stable is an emphasis on security.
“Mastercard Installments has been built on our guiding principles to protect consumers and enable choice without sacrificing trust and security,” Mastercard CPO Craig Vosburg said.
Mr Vosburg said that the program builds on Mastercard’s previous investments in open banking.
“At the heart of it, payments come down to choice — and people want more from their money with greater flexibility and control in how they pay and where they shop,” he said.
Full details on how Mastercard Installments will work are expected to arrive in 2022.
About the author
About the author
Borrow
Non-bank lending to be covered by Consumer Data Right
The government has proposed expanding the Consumer Data Right to non-bank lending as well as superannuation and general insurance. Read more
Borrow
MoneyMe completes SocietyOne acquisition
The firm has added a former SocietyOne director to its board. Read more
Borrow
BNPL might not be credit, but it can still affect your credit score
Even those opting for alternatives to a traditional credit card should keep their credit score in mind when it comes to keeping on top of repayments. Read more
Borrow
Borrowing money to buy shares: When is it worth it?
Investing with borrowed money can be risky, but it’s all about timing. Read more
Borrow
Renters still have options when it comes to going green
Just because you don’t own your home doesn’t mean you can’t reduce your carbon footprint. Read more
Borrow
Could a financial passport make life easier for consumers?
When it comes to the benefits of open banking, a financial passport might only be the beginning. Read more
Borrow
BNPL company accused of unsafe lending
Humm has been named as a recipient of Choice’s Shonky Award. Read more
Borrow
RBA says BNPL ‘no surcharge’ rules distort competition
Australia’s central bank has changed its mind about whether existing credit card surcharge rules should apply to Afterpay and Zip. Read more
Borrow
Non-bank lending to be covered by Consumer Data Right
The government has proposed expanding the Consumer Data Right to non-bank lending as well as superannuation and general insurance. Read more
Borrow
MoneyMe completes SocietyOne acquisition
The firm has added a former SocietyOne director to its board. Read more
Borrow
BNPL might not be credit, but it can still affect your credit score
Even those opting for alternatives to a traditional credit card should keep their credit score in mind when it comes to keeping on top of repayments. Read more
Borrow
Borrowing money to buy shares: When is it worth it?
Investing with borrowed money can be risky, but it’s all about timing. Read more
Borrow
Renters still have options when it comes to going green
Just because you don’t own your home doesn’t mean you can’t reduce your carbon footprint. Read more
Borrow
Could a financial passport make life easier for consumers?
When it comes to the benefits of open banking, a financial passport might only be the beginning. Read more
Borrow
BNPL company accused of unsafe lending
Humm has been named as a recipient of Choice’s Shonky Award. Read more
Borrow
RBA says BNPL ‘no surcharge’ rules distort competition
Australia’s central bank has changed its mind about whether existing credit card surcharge rules should apply to Afterpay and Zip. Read more