New ‘Mastercard Installments’ takes on BNPL’s big players

Today, payments giant Mastercard announced a new Buy Now Pay Later (BNPL) program. 

Challenging the likes of BNPL big players such as Afterpay, Zip, Klarna and humm as well as big banks like CommBank, Suncorp and Citi (who each offer their own BNPL options), Mastercard claims to be shaking things up. 

And that’s with its new program ‘Mastercard Installments’. 

“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,” said Mastercard’s chief product officer, Craig Vosburg. 

“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.”

How does Mastercard Installments work? 

As the name suggests, Mastercard Installments is an instalments-based payment option, also known as Buy Now Pay Later. 

By using the company’s trusted network, Mastercard aims to make BNPL widely available to Aussies and internationally. The program allows existing banks, lenders, fintechs and wallets to offer BNPL to customers at a wide range of merchants where Mastercard is accepted. 

“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,” Mastercard’s division president, Australasia, Richard Wormald said. 

“Mastercard Installments builds on these strong foundations, enabling local banks, lenders, fintechs and merchants to customise their own buy now, pay later model – providing new ways to pay that work online and in-store, backed by the security and peace of mind that comes with a Mastercard transaction.”

Mastercard Installments will be available both in-store and online. The program is interest-free and allows customers to repay purchases in four instalments. 

There will be two BNPL options available through this program: 

• Pre-approved instalments: This will be through a lender’s banking app. Pre-approved instalments will be available to be used directly with a retailer wherever Mastercard is accepted. ‘Pre-approved instalments’ can be stored in your preferred digital wallet, such as Mastercard’s Click-to-Pay, ready for use online or in-store. 
  

• Instant approval: This option won’t be available on launch, but will be ready for use shortly after. Instant approvals is a feature where customers may be eligible to be instantly approved for BNPL at the checkout at the time of purchase. 
  

As part of Mastercard’s investment in open banking, the approvals process allows lenders to choose to review applicants’ account-level transaction history (with consent from the customer). This is to ensure appropriate credit is safely offered to shoppers.

It’s also important to note that with Mastercard Installments, customers will be covered by Mastercard’s zero liability fraud protection. This means, as a Mastercard customer you’ll be protected from being liable in the case of fraudulent activity and you’ll be repaid for the money you lose.  

Which lenders will offer Mastercard Installments in Australia? 

So far, Mastercard has been working with Qantas and Latitude Financial to offer Mastercard Installments in Australia. 

“Through our long-standing partnership, Latitude is looking forward to working with Mastercard to bring new BNPL payment solutions to life in Australia, benefiting merchants and providing customers with a superior shopping experience,” Latitude Financial’s managing director and chief executive officer, Ahmed Fahour said. 

However, there has been no set date to when these providers will roll-out the program and according to Mastercard, there are plans to extend the platform to other providers as well. 

Want to find out more about Buy Now Pay Later options that are available in Australia right now? Jump over to our Buy Now Pay Later hub for more info!