Mastercard is jumping on the ‘buy now, pay later’ (BNPL) train by offering banks and fintechs capabilities to offer these solutions. Barclays U.S. consumer bank, SoFi, Synchrony, Marqeta, and others will be using Mastercard’s BNPL toolset when it goes live next year in the U.S., Australia, and the U.K.

Why should we care?
Mastercard’s entry into the BNPL space adds pressure on a growing market of companies seeking a piece of a lucrative market. Mastercard Installments, as the offering is called, will integrate with the payment systems of client banks and fintechs to allow them to offer BNPL services to their customers. BNPL solutions increase average sales by 45% and reduce cart abandonment by 35% post-implementation, according to Mastercard. The BNPL space has become more competitive recently, spurred on by Square’s planned $29B acquisition of Afterpay and the launch of Amazon’s partnership with BNPL provider Affirm. As BNPL adoption increases, however, there are risks for consumers. A recent Credit Karma study found that a little over 40% of Americans have used a BNPL service. If found that while 62% said they have never missed a payment, 38% reported they fell behind on payments at least once. Almost three-quarters of survey respondents with a late payment said they saw their credit scores drop. Despite the risks for consumers, the list of companies in the space continues to grow, with PayPal, Klarna, Mastercard and Fiserv, American Express, Citi, and JPMorgan Chase offering BNPL solutions.