Mastercard (NYSE:MA) is broadening its Installments program to encompass a wide range of U.S. digital points of sale, reflecting an ongoing shift in consumer payment preferences. This initiative allows merchants, financial service providers, payment processors, and digital wallets to offer installment options for customers using eligible credit cards from participating issuers. The expansion aims to cater to growing consumer demand for flexible payment solutions, thus enhancing the purchasing experience across various channels.
This latest move by Mastercard builds on previous efforts to meet the evolving needs of consumers and businesses. Historically, consumers have shown a growing interest in installment payment options, leading to more businesses integrating such services into their offerings. Mastercard’s engagement in this space has been consistent, focusing on providing transparency and ease of use for both consumers and merchants.
How Does the Program Work?
The expanded program allows participating issuers to offer card-linked installment plans through an application programming interface (API)-based platform. This provides consumers with the ability to spread the cost of their purchases over time. Merchants, in turn, benefit by connecting to the API, giving them access to pre-approved offers that can be presented to customers during checkout.
What Are the Benefits for Stakeholders?
The benefits of this initiative are multifaceted. Consumers gain more control over their spending, particularly for large purchases, through tailored installment payment options. For merchants, offering these plans can be a competitive advantage, as data indicates that half of consumers are willing to switch to businesses providing installment options linked to their existing credit cards.
Seema Chibber, Executive Vice President of Core Products for Mastercard North America, emphasized the importance of this initiative in driving consumer demand and adoption. Mastercard’s efforts align with a broader trend where businesses seek to offer transparent and flexible payment solutions to meet consumer expectations.
“Over the past few years, we’ve seen consumer demand and adoption of installments continue to rise as digital payment options grow across channels,” Chibber noted.
Research from PYMNTS and Splitit supports this development, revealing that a significant percentage of consumers prefer credit card installments for high-value purchases, influencing their choice of merchants. Furthermore, more than 70% of merchants expressed a preference for consumers to use existing credit cards for installment plans.
The expansion of Mastercard’s Installments program represents a strategic response to the evolving landscape of consumer finance. As digital payment options continue to gain traction, both merchants and financial service providers are adapting to meet these new demands. This initiative could lead to increased merchant loyalty and customer retention, as businesses that offer installment plans may see a higher rate of consumer engagement.
