Ever since the first credit cards were issued in the late 50s, consumers have had to weigh how much they’ve wanted their favorite products against the delayed financial pain of bill due dates. Coming in the middle or at the end of the month, this payment deadline has been a thorn in consumers’ fiscal sides for decades, but MasterCard has a plan to change all that.
Finextra reported that MasterCard is set to begin pilot programs across Europe that will allow customers to pay for purchases on their cards through installment payments instead of monthly lump sums. While initial customers will sign up with issuers if they’d like to participate in the test period, choosing installments will take place at the point of sale. Shoppers will be prompted by partnering merchants to select a payment method for each or all of their items, and MasterCard will take care of the rest.
It’s a setup that MasterCard thinks will appeal to a new generation of credit card users and one that Andrew Buckley, head of core products in Europe for MasterCard, explained is a necessary step forward for MasterCard and the entire issuing industry as a whole.
“Today, everyone is looking for a smarter way to shop. Consumers want flexible payment solutions that will help them fulfill their needs, while maintaining a better control over their budget,” Buckley said in a statement to Finextra.
The move toward flexible payment options is an increasingly common one in retail today. The Guardian reported that Amazon has started a similar program for shoppers in the U.K. that purchase items totaling over about $565. Instead of settling bills right then and there, shoppers who sign up for the retailer’s Amazon Pay Monthly program instead are offered the option of receiving a loan from a partnering bank and paying it off at 16.9 percent interest over up to two years.