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Mastercard (MA) Extends BNPL Program to Specific Asian Cities

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Mastercard Incorporated MA recently joined forces with Asia’s well-established financial services group DBS Bank and merchant commerce platform Pine Labs to unveil the “Mastercard Installments with Pine Labs” program.

The benefits of the program can be initially availed by Singapore’s DBS/POSB credit cardholders from March 2022, followed by the same being extended to Indonesia and Hong Kong SAR in the second quarter of 2022. The program can be utilized for local transactions undertaken with DBS/POSB credit cards. There are plans to widen the scope of this program to cross-border transactions in the days ahead.

Coming to the program’s benefits, consumers residing in the cities wherein the program will be launched can engage in purchases and pay for them in monthly installments at those merchants who are equipped with the “Pay Later” identifier. It is worth mentioning that these installments will be devoid of any interest charge. In this manner, consumers can avail of lucrative Buy Now, Pay Later (BNPL) offers provided by a wide variety of merchants by simply utilizing one’s DBS/POSB cards at checkout. Leveraging Mastercard technology will make the checkout experience of consumers all the more hassle-free and reliable.

Mastercard has always been focused on collaborating with industry leaders. The recent partnership to execute seamless installment payments, which is in great demand these days, is a testament to the same. DBS Bank and Pine Labs seem to be the apt partners for complementing MA’s endeavors owing to the fact that both of them boast a strong presence in the attractive BNPL market. In fact, the BNPL sales of DBS Bank in Singapore attained record growth last year.

Efforts similar to the latest one are expected to bolster Mastercard’s presence in the BNPL space, which has been gaining prominence owing to the numerous benefits offered. The recent tie-up bears testament to MA’s efforts to address consumers’ evolving needs for flexible payment options. To cater to the purpose, Mastercard has been collaborating with several local and well-established global organizations for a long time.

The latest initiative seems to be a time opportune one since the BNPL market is well-positioned for solid growth, since consumers’ buying behavior is positively influenced if allowed to make payments in installments, and it enables them to properly manage their finance and expenses. This bodes well since the COVID-19 pandemic has induced severe financial uncertainties worldwide and exerted pressure on the purchasing power of consumers. Per Grand View Research, the worldwide BNPL market is anticipated to witness a CAGR of 22.4% over the 2021-2028 period. Also, the growing inclination of people toward digital means somewhat serves as a tailwind for the rapid growth of the BNPL market.

For harnessing the solid growth of the BNPL space, Mastercard has a program in place named Mastercard Installments. The service is expected to be initially launched across the United States, Australia and the U.K. Last year, Mastercard included more participants within its BNPL program to better serve customers opting for installment payments while making purchases. Thanks to the MA product, BNPL services have been made available to millions of consumers and merchants worldwide.

Shares of Mastercard have inched up 1.2% in the past six months against the industry’s decline of 18.9%. MA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Similar to Mastercard, other companies such as Visa Inc. V, Global Payments Inc. GPN and American Express Company AXP are also active players in the BNPL space.

Visa’s installment solution was first launched as a pilot in 2019. Gradually, the solution expanded to the United States, Canada, Malaysia and Russia. V’s solution was launched in Australia in 2021. A substantial number of issuers, acquirers and fintechs utilize Visa Installments Solution to help customers access BNPL options.

Global Payments has enhanced installment solutions in place, which if integrated within the operations of a company, assures improved checkout experiences. GPN’s company TSYS partnered with Mastercard in 2020 to help issuers and merchants in North America provide flexible payment options through which customers holding Mastercard cards can divide the payment for their purchases into parts or installments.

American Express has been an active player in the BNPL space. AXP extended BNPL offerings beyond the retail consumer space and integrated these services within the travel space last year.

American Express stock has gained 13.2% in a year. Meanwhile, shares of Visa and Global Payments have lost 7.9% and 17.4%, respectively, in the same time frame.


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