Buy Now, Pay Later (BNPL) services have enjoyed an almost frenetic boom since the beginning of the coronavirus pandemic, with some growing by triple digits during the holiday season of 2020. Now, a major payment network is joining the fray. On Sept. 28, Mastercard announced that it plans to launch a new program in 2022 to offer buy now, pay later services to a variety of banks, lenders, fintech companies, digital wallets, and others.

Key Takeaways

  • Mastercard will soon partner with a variety of financial services companies to provide buy now, pay later (BNPL) services to consumers.
  • The payment network will also allow existing BNPL platforms to use its program to broaden their reach.
  • BNPL services allow shoppers to make a purchase online and sometimes in-store and pay for it in equal installments over time instead of all upfront.

Mastercard Move Will Extend BNPL Services to More Consumers

Mastercard, which processes both debit and credit card transactions, is working with several financial institutions, including Barclays, Fifth Third, Huntington, SoFi, and Synchrony, to offer BNPL services to consumers.

The program won't be limited to those companies, however. According to a report in The New York Times, Mastercard also plans to allow existing BNPL services, such as Afterpay, Klarna, Sezzle, and Zip, to use its program to broaden their own reach.

The program will allow lenders to provide pre-approved offers to customers through their mobile apps, or they can offer instant approval at checkout, either online or in-store.

Consumers can also give Mastercard permission to view their bank accounts, which may improve their chances of approval.

In addition to the installment payment plan, Mastercard will also provide zero-liability fraud protection and the ability for consumers to dispute unauthorized charges.

One of Mastercard's top competitors, Visa, has also teamed up with multiple BNPL services to expand their reach, including new products like virtual cards. Visa also offers an installment payment option to select Commerce Bank Visa cardholders, and it plans to expand that to other financial institutions in 2022.

Mastercard's program will begin in the first quarter of next year.