Mastercard taps into buy now, pay later market with latest offering

Sept 28 (Reuters) – Mastercard Inc on Tuesday launched a purchase now, pay later service, tapping right into a market that’s threatening to chip away on the dominance of bank cards as a most important supply of funds.

The purchase now, pay later sector obtained a lift throughout the COVID-19 pandemic as cash-strapped consumers have been drawn to the service as a result of ease of creating part-payments for merchandise they purchased on-line or at shops, with out further prices or charges.

That, in flip, has led to a surge in enterprise at among the largest gamers out there, together with Klarna, Affirm Holdings , Afterpay Ltd and PayPal Holdings Inc , whereas driving a string of huge takeover offers.

In August, Sq. Inc — the funds agency of Twitter Inc co-founder Jack Dorsey — in a $29 billion deal, whereas earlier in September, PayPal mentioned it will in a $2.7 billion deal.

Mastercard mentioned on Tuesday its Mastercard Installments program will enable customers to pay for on-line and in-store purchases by way of equal and interest-free installments, including that it is going to be obtainable in markets throughout the USA, the UK and Australia.

The purchase now, pay later choice permits banks, lenders, fintech corporations and wallets the flexibility to supply BNPL options, Mastercard mentioned. Clients may also be capable of entry such gives digitally, pre-approved by way of the lender’s cell banking app or by way of instantaneous approval throughout checkout, it mentioned.

Corporations providing purchase now, pay later companies sometimes cost retailers a price for providing small, point-of-sale loans to prospects that are paid again in interest-free installments, bypassing credit score checks within the course of.

Different massive corporations reminiscent of Apple Inc and Goldman Sachs are additionally on a BNPL providing.

Reporting by Sohini Podder in Bengaluru; enhancing by Uttaresh.V

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