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Mastercard (MA) Extends Program Reach to Boost BNPL Presence

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Mastercard Incorporated MA recently included a bunch of partners within its Buy Now Pay Later (BNPL) program named Mastercard Installments. The move highlighted MA’s efforts of bolstering the reach of the program that offers flexible installment payments for consumers.

The added partners primarily comprise BNPL specialists and worldwide recognized brands that include Amount, Bass Pro Shops and Cabela's, Deserve, H&R Block and Walgreens. The new partners will join the other leading partners under the BNPL program and can avail the exclusive benefit of utilizing the cutting-edge open loop model of Mastercard Installments. This will lead to increased utilization of MA’s BNPL solution, which is expected to fetch substantial revenues for the company.

Mastercard’s reliable worldwide acceptance network, consisting of over 83 million merchant locations, infuses the trust of the participating partners in delivering enhanced and secured BNPL services. This, in turn, continues to bolster the scale of MA’s program.

Mastercard Installments, which was initially launched across the United States, Australia and the U.K. last year, have proved its credibility in extending the much-in-demand BNPL services to millions of consumers and merchants worldwide. The program continues to gain widespread popularity for not only enabling consumers to make seamless installment payments carrying zero interest but also making the process a hassle-free and cost-effective one for merchants interested in providing BNPL services. Meanwhile, merchants are not required to integrate the BNPL solution within their infrastructure for offering these services.

Since the program's launch in 2021, Mastercard has been quite active in expanding the reach of its program globally. The technology company in the global payments industry has also resorted to collaborations with prominent BNPL players for launching improved BNPL products. Similar to the recent move, in November 2021, MA added American Airlines, CSI, Fiserv and Total System Services (“TSYS”) to its BNPL program in the United States. Mastercard joined forces with Australian BNPL players hummgroup and Limepay last year.

All such initiatives provide a clear-cut indication of MA’s sincere efforts to strengthen its presence in the booming BNPL space. With respect to this endeavor, the year 2022 has been quite a notable one for Mastercard. In March 2022, MA joined forces with Mexico’s BNPL platform Aplazo to introduce an innovative virtual card backed with BNPL facility for enabling Latin American consumers to pursue digital installment payments. In the same month itself, the company joined forces with DBS Bank and Pine Labs to launch a program aimed at providing consumers in selected Asian cities access to BNPL offers provided by a wide range of merchants.

Mastercard intends to harness the opportunities prevailing in the BNPL market, which is anticipated to witness considerable growth in the days ahead. The market has been gaining importance, courtesy of the numerous benefits offered by the BNPL platforms, which are becoming increasingly popular as the preferred payment option when shopping both in-store or online. Though the global economy continues to somewhat rebound from the COVID-19 pandemic-induced dismal period, the purchasing power of consumers remains strained to some extent. With installment payments, consumers are relieved from the pressure of paying the entire amount at the time of checkout and can properly manage their finance and expenses. Per Allied Market Research, the worldwide BNPL market is anticipated to witness a CAGR of 45.7% over the 2021-2030 period.

Shares of Mastercard have gained 1.4% in the past six months against the industry’s decline of 21.8%. 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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Other Companies Offering BNPL Services

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 significant 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. The tie-up empowered customers holding Mastercard cards to 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. In March 2022, American Express expanded its BNPL solution Plan It to Delta with an aim to boost its presence in the thriving BNPL space and integrate such solutions within the travel industry.

American Express stock has gained 12.5% in the past six months. Meanwhile, shares of Visa and Global Payments have lost 3.8% and 16.6%, respectively, in the same time frame.

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Mastercard Incorporated (MA) : Free Stock Analysis Report

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