The news: Mastercard added H&R Block, i2c, Walgreens, and other partners to Mastercard Installments, the buy now, pay later (BNPL) program it announced in September, per a press release.
Here’s how it works: Mastercard Installments lets the card network’s merchants offer BNPL options—including pay-in-four interest-free installment plans—through a direct integration into their platforms.
Customers can apply at the point-of-sale (POS) or with banks, lenders, and other financial institutions (FIs) like Synchrony and SoFi. They can get instantly approved at checkout or be pre-approved through their lender’s or FI’s mobile app, which can then be stored in their digital wallets and used wherever Mastercard is accepted.
Mastercard’s benefit: Two factors give Mastercard Installments a strong edge in the BNPL space.
The bigger picture: The number of US BNPL users is expected to grow 31.4% year over year (YoY) to hit 59.3 million in 2022, per Insider Intelligence forecasts.
Players like Affirm, Afterpay, and Klarna have dominated the space, but that may change as payments titans like Mastercard and Visa quickly build out their own BNPL programs. Even though these providers can use Mastercard Installments to access Mastercard’s payments rails and scale merchant acceptance, the card network’s presence increases competitive pressures by making it harder to stand out. This may be why BNPL incumbents are exploring sectors like healthcare and offering more traditional banking solutions to diversify their business lines.