As consumers seek payment options and merchants try to meet the demand, Mastercard announced Wednesday (Sept. 2) that it has partnered with TSYS, a global payments FinTech that allows shoppers to buy now, pay later (BNPL).
“This new collaboration with Mastercard gives our issuing clients the ability to offer best-in-class installment payment experiences to their cardholders, while enabling consumers to choose when they want to pay,” said Gaylon Jowers, TSYS president, in a statement.
The deal allows Mastercard customers to split transactions into installments before, during or after checkout. It supplements Mastercard’s merchant offerings through application programming interface (API)-based solutions, commercial partnerships and acquisitions, the company said.
“Adding the installment lending function to a bank card is suitable for all parties in the transaction,” said Brian Riley, director of the credit practice at Mercator Advisory Group, a Massachusetts consultant to the payments industry, in a statement.
Riley added it allows consumers to have a discrete transaction, separate from their general purchasing, while merchants close the sale and have the chance to upsell the customer.
Three of four Americans who have tried installment plans for the first time during the pandemic plan to continue using them after it is over, according to Mastercard.
Earlier this year, Zahir Khoja, Mastercard’s executive vice president of Global Merchant Solutions and Partnerships, told PYMNTS its latest example of the company’s push into BNPL was the 2019 purchase of point of sale financing provider Vyze.
“There are a number of things in the market pushing [Buy Now, Pay Later], merchants that want to increase their basket sizes, lenders who are looking to new ways to reach consumers with products, consumers that want choices at checkout — the combination of all of these things have combined together and that is what is driving this market so quickly worldwide,” Khoja said.
In the latest edition of Buy Now, Pay Later Tracker, PYMNTS reported BNPL plans that can help consumers handle everyday and big-ticket purchases are gaining popularity in the U.S., where the pandemic’s economic effects are causing consumers to cool spending because they allow customers to pay for goods in installments or delay payments without facing high-interest fees that can lead to debt.