Banking
Mastercard taps into buy now, pay later market with latest offering
Published by maria gbaf
Posted on September 29, 2021
2 min readLast updated: February 1, 2026
Global Banking & Finance Review®
Company
Published by maria gbaf
Posted on September 29, 2021
2 min readLast updated: February 1, 2026
Mastercard has launched a buy now, pay later service, offering interest-free installments in the US, UK, and Australia, challenging credit card dominance.
(Reuters) -Mastercard Inc on Tuesday launched a buy now, pay later service, tapping into a market that is threatening to chip away at the dominance of credit cards as a main source of payments.
The buy now, pay later sector got a boost during the COVID-19 pandemic as cash-strapped shoppers were attracted to the service due to the ease of making part-payments for products they bought online or at stores, without additional costs or fees.
That, in turn, has led to a surge in business at some of the biggest players in the market, including Klarna, Affirm Holdings, Afterpay Ltd and PayPal Holdings Inc, while driving a string of big takeover deals.
In August, Square Inc — the payments firm of Twitter Inc co-founder Jack Dorsey — bought Afterpay https://www.reuters.com/technology/square-buy-australias-afterpay-29-billion-2021-08-01 in a $29 billion deal, while earlier in September, PayPal said it would acquire Japanese BNPL firm Paidy https://www.reuters.com/business/paypal-buy-japan-based-paidy-27-bln-deal-2021-09-08 in a $2.7 billion deal.
Mastercard said on Tuesday its Mastercard Installments program will allow consumers to pay for online and in-store purchases through equal and interest-free installments, adding that it will be available in markets across the United States, the United Kingdom and Australia.
The buy now, pay later option enables banks, lenders, fintech firms and wallets the ability to offer BNPL solutions, Mastercard said. Customers will also be able to access such offers digitally, pre-approved through the lender’s mobile banking app or through instant approval during checkout, it said.
Companies offering buy now, pay later services typically charge merchants a fee for offering small, point-of-sale loans to customers which are paid back in interest-free installments, bypassing credit checks in the process.
Other large companies such as Apple Inc and Goldman Sachs are also reportedly working https://www.reuters.com/technology/apple-goldman-sachs-planning-buy-now-pay-later-service-bloomberg-news-2021-07-13 on a BNPL offering.
(Reporting by Sohini Podder in Bengaluru; editing by Uttaresh.V)
The article discusses Mastercard's entry into the buy now, pay later market, offering interest-free installment services.
How does Mastercard's BNPL service work? It allows consumers to make purchases through equal, interest-free installments.
What regions are targeted by Mastercard's BNPL service? The service is available in the United States, United Kingdom, and Australia.
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