Mastercard Installments Buy Now-Pay Later Coming to More Small Businesses

Mastercard has joined forces with multiple new global partners to enhance its new Mastercard Payments program, which is expanding to support more small businesses in the United States.

Mastercard’s Buy Now Pay Later Fees Reach More Small Businesses

Mastercard is looking to meet demand for powerful Buy-Now-Pay-Later (BNPL) schemes, particularly with familiar and trusted brands. Its new partners will support the program, including US-based financial institutions such as Cross River, Live Oak Bank, MOCA Financial and WebBank, as well as others in the UK and Saudi Arabia.

Consumer protection and data transparency

In addition to offering more payment options, Mastercard’s fees will also focus on responsible lending practices to support consumers with an enhanced set of protections, such as data transparency and information-driven programs to improve product

Using technology, data and insights, as well as its deep consulting expertise, Mastercard aims to create a “smarter way” to offer installment loans at scale.

Banks respond to Mastercard fees

Mastercard Chief Product Officer Craig Vosburg explained: “We believe that no matter how you pay, a foundation of strong protections must be in place. Trust is the currency of innovation. Using a of responsible design ensures we stay ahead of the needs and expectations of consumers, merchants and banks, continually building trust in the payments ecosystem by offering options at scale.”

A number of banking representatives have responded to the news of Mastercard’s fees, including new partner HSBC’s Madhu Kejriwal, who urged caution, saying: “Customer expectations have evolved as the payments landscape has evolved, so that banks need to find appropriate solutions. BNPL is at the intersection of payments and lending; it can offer customers a seamless payment option. However, it is important to realize that it is very much a form of credit. HSBC is fully committed to responsible lending, and providing transparency to customers is of the utmost importance to us. We want to clearly position any BNPL payment plan as part of a customer’s approved line of credit.” Kejriwal added that the partnership with Mastercard is a crucial element of his organization’s responsible lending strategy, as it will enable HSBC to offer customers access to trusted payment options, especially in cases where the customer wants budget for larger purchases with affordable payment plans.

Live Oak Bank President Huntley Garriott also lent his voice in support of Mastercard’s fees, adding: “Live Oak knows that small business customers need flexible financial products that provide security, transparency and scalability so they can grow their business at a pace that suits their needs We are delighted to partner with Mastercard to explore lending solutions through the Mastercard Installment Program as it allows us to offer innovative products from a trusted source while aligning with our mission to be America’s small business bank.”

Protections, Mitigated Risk and Analytics

Mastercard’s installment payment program will improve consumer protection by making lenders agree to follow applicable laws and the network’s guidelines on responsible lending practices and data usage practices. The program will mitigate repayment risks with open banking and artificial intelligence and use cutting-edge insights and analytics to access a detailed set of data dashboards to better understand the performance of its products.

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Image: Depositphotos

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