Mastercard installments Buy now – pay later for more small businesses

Mastercard has joined forces with multiple new global partners to enhance its new Mastercard payment program, which is expanding to support more small businesses in the United States.

Mastercard installments Buy now – pay later for more small businesses

Mastercard is trying to meet the demand for strong Buy-Now-Pay-Later (BNPL) schemes, especially with well-known and trusted brands. Their new partners will support the program, including US-based financial institutions such as Cross River, Live Oak Bank, MOCA Financial and WebBank, as well as others from the UK and Saudi Arabia.

Consumer protection and data transparency

In addition to providing more payment options, Mastercard Installment Payments will also focus on responsible lending practices to support consumers with an enhanced set of safeguards, such as data transparency and insight-based product improvement programs.

Using technology, data and insights, as well as their wealth of advisory expertise, Mastercard aims to create an “intelligent way” to offer installment loans at scale.

Banks respond to Mastercard payments

Mastercard’s Chief Product Officer, Craig Vosburg, explains: “We believe that no matter how you pay, there should be a foundation of strong protection. Trust is the currency of innovation. Using a Responsible-by-Design approach ensures that we stay ahead of the needs and expectations of consumers, merchants and banks and continue to build trust in the payments ecosystem by providing choice at scale.”

Numerous representatives of banking institutions have responded to the news about Mastercard payments, including Madhu Kejriwal of new partner HSBC, who urged caution by saying: “Customers’ expectations have evolved as the payments landscape progresses, so banks need to find appropriate solutions. BNPL is at the intersection of payments and borrowing; it can provide customers with seamless payment option. However, it is important to realize that it is a form of credit. HSBC is fully committed to responsible lending and providing transparency to clients is of the utmost importance to us. We want to clearly position each BNPL payment plan as part of a customer’s approved line of credit.” Kejriwal added that the partnership with Mastercard is a critical part of his organization’s responsible lending strategy, as it will enable HSBC to provide customers with access to trusted payment options, especially in cases where the customer wants to budget for larger purchases with affordable payment plans.

Huntley Garriott, the president of Live Oak Bank, who also backed his vote to support Mastercard payments, adding: “Live Oak knows that small business customers need flexible financial products that provide security, transparency and scalability so they can grow their business at the pace that suits their needs.We are excited to partner with Mastercard to explore credit solutions through the Mastercard installment program, as it enables us to deliver innovative products from a trusted source, while aligns with our mission to be the US small business bank.”

Protections, mitigation and analytics

The Mastercard Term Program will enhance consumer protection by requiring lenders to comply with applicable laws and network guidelines regarding responsible lending practices and data use. The program will reduce redemption risk with open banking and AI, and use advanced insights and analytics to access a detailed set of data dashboards to better understand how their products are performing.

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