MasterCard has stepped up its battle against competing Buy it now and pay later providers with the introduction of Installment Payments, a payment program for online and in-store purchases in the UK, Australia, and the US.
MasterCard Raten enables banks, lenders, fintech, and wallets to offer flexible BNPL experiences to merchants across the underwriting network.
The card system works with Barclays US, Fifth Third, FIS, Galileo, Huntington, Marqeta, SoFi, and Synchrony in the USA and with Qantas Loyalty and Latitude in Australia as part of the BNPL program.
It enables members to offer consumers a variety of flexible rate options, including zero percent interest payments in four models, without integrating the bottleneck into the business infrastructure.
MasterCard leverages open banking technology through Finicity in the US and the upcoming acquisition of Aiia in Europe to use consumer authorization data in conjunction with debit or bank account information to perform access checks on applicants.
“At the heart of the problem is payment – people with more flexibility and control over how to pay and where to shop need more money,” said Craig Vosburg, MasterCard’s chief product officer. “The MasterCard Rate is based on our guiding principles to protect consumers and enable choice without sacrificing trust and security. It is an assisted digital payment method made today and tomorrow through the most trusted relationships consumers have with their banks and other lenders from merchants of their choice.
MasterCard’s entry into the emerging BNPL Visa market follows a competitive card program that launched a website that offers its credit card issuers APIs to develop and test their payment programs. The users can choose the duration of the loans, the participating merchants and cards as well as the interest and costs.
The APIs are then available to review eligible plans for a transaction, select a plan, convert the original transaction into an installment plan, and then schedule payments.
In Canada, Visa has already signed CIBC, Desjardins, and Scotiabank with the BNPL offering, and Commercial Bank is the first partner in the United States.