Thursday, April 14, 2022
Kirkpatrick's comments accompanied an announcement about the expansion of Mastercard Installments, the BNPL product introduced in 2021. Mastercard added eight new partners to the program, including merchants, banks and bank technology partners. The eight are:
"With our vast acceptance and reach, Mastercard is uniquely positioned to enable lenders and merchants to deliver seamless and secure BNPL experiences at scale," Kirkpatrick said. "Our diverse new partners represent the versatility and agility of our BNPL program."
Mastercard Installments lets consumers digitally access BNPL offers, either pre-approved through a lender's mobile banking app or through an instant approval process at checkout. Pre-approved installments can be used directly on a merchant's website or stored in digital wallets to be used online or in-store. Payments are made through a single-use Mastercard virtual card and benefit from the same zero-liability fraud protection consumers get when using credit cards.
Mastercard also makes it easy for merchants to offer BNPL, Silvana Hernandez, senior vice president for digital payments, stated during a panel discussion at the Northeast Acquirers Association conference held April 6 and 7 in Philadelphia. "Merchants can offer it without having to invest in technology," she said.
"Our customers look to us for cutting-edge card products, and BNPL has been at the top of the list, but until now there hasn't been an easy way for fintechs to include BNPL in their card-issuing programs," said Bo Jiiang, CEO and co-founder of Lithic. "Mastercard is making BNPL more broadly available than it's ever been, and through our partnership, Lithic is able to bring this feature to companies of all sizes, from startups to enterprise companies."
Banks and retailers have offered some iteration of installment purchases for decades. It has taken on added appeal in the past few years, however, as nonbanks like PayPal and Block have pressed the reset button on consumer demand.
Afterpay, the BNPL arm of Block, had a 21 percent share of the U.S. market for BNPL last year, according to Moody's Investors Service. PayPal claims 400 million active users worldwide of its Pay-in-4 BNPL product; Moody's estimated PayPal has an 11 percent share of the U.S. BNPL market; at 712 percent, PayPal saw the most growth in BNPL transaction volume last year.
A new report from Moody's predicts BNPL will be a growth driver for both PayPal and Block. But Moody's analysts suggest there remain plenty of opportunities for banks to leverage their relationships with consumers and the card networks to snag BNPL market share.
"We believe BNPL has significant growth potential because of its value added to both merchants and consumers, for which merchants are willing to pay," Moody's analysts wrote in a new report. "The strategic approaches to the BNPL product can differ across providers and markets, but to date many approaches have been successful in the strongly growing environment."
The report also stated, "Leveraging the ubiquity of the card networks and their own large customer bases, the banks are well positioned to cost-efficiently offer point-of-sale installment products to merchants, with synergies from integration into the consumers' financial lives center and other banking products." 
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