Mastercard Sets Sights Beyond Retail as It Embeds BNPL Into Network

The buy now, pay later pure plays like Klarna and Affirm might get a lot of attention these days. However, card networks have a piece of the BNPL pie as well.

From apparel to electronics to medical bills, today’s shoppers increasingly expect a flexible payment solution at checkout, and for that, no company worth its salt can afford to miss out on the revenue and the customer experience.

The trend certainly has attracted attention at Mastercard. As part of the “Pay Later Unpacked” virtual event at PYMNTS, Seema Chibber, executive vice president of Core Products for the Americas, shared insights into how Mastercard aims to integrate installment and BNPL features more deeply into its network infrastructure, the company’s partnership-driven approach, and the potential to expand BNPL into verticals beyond retail.

Asked about Mastercard’s overarching vision for installments and how it supports the company’s network role, Chibber underscored the need for versatile solutions that fit a rapidly changing ecosystem.

“We’ve literally seen an explosion in the preference for installments,” she said. “And when you put it all together — people seeking expanded buying power, control and financial management, and the flexibility and convenience of a digital experience — we had to be ahead of this trend. That is why we’ve been investing in capabilities that are versatile, so whether it’s a buy now, pay later option offered by a FinTech, a traditional issuer’s credit program or a debit-based solution, Mastercard is embedding installments right into the payments experience.”

Central to this approach is Mastercard’s commitment to evolving its payments infrastructure to accommodate shifting consumer tastes. The company’s installments strategy is not a side project or temporary add-on, Chibber said. Rather, it is a suite of capabilities woven into the broader network, offering seamless integration for businesses and consistent, familiar experiences for end users.

Mastercard has worked to ensure that its rules, franchise governance, security protocols and settlement guarantees fully align with installment-based transactions, she said. By providing a unified ecosystem that can accept, process and secure installment payments, Mastercard aims to alleviate technical hurdles for merchants and financial institutions.

Partnerships are key to achieving this scale. Whether the company works with Affirm or established financial institutions like J.P. Morgan, Galileo and other acquirers, Mastercard’s guiding principle is a “partner-first” framework, Chibber said. Because “no one size fits all” in BNPL, Mastercard has built a broad set of tools — APIs, rule frameworks and security protocols — that can be adapted to each partner’s unique requirements.

The goal is to provide universal acceptance of BNPL while respecting that a global retailer’s priorities may be different from those of a local healthcare provider and that a large financial institution’s requirements differ from a technology startup’s.

Mastercard’s emphasis on partnership also informs how it plans to expand BNPL into new verticals. Although many consumers first encountered installments at retail checkouts for electronics or clothing, the company sees strong potential for growth in areas like healthcare, professional services and B2B transactions, Chibber said.

Large-ticket items — like hospital bills or small business expenses — are prime candidates for installment plans. However, bringing BNPL to these “alternate industries” can introduce new challenges around acceptance infrastructure and technology integration, she said.

Mastercard’s tactic is to use the foundation of its payment franchise: secure interoperability, guaranteed settlement and robust rules. These features give verticals such as healthcare and professional services “comfort to embark on building out their acceptance infrastructures, riding off of the promise of the franchise of Mastercard,” Chibber said.

Amid industry discussions about credit risk and rising scrutiny of BNPL offerings, Mastercard’s philosophy is to grow responsibly, she said. The company has historically adhered to regulatory requirements in every region where it operates. Its BNPL product suite is no exception. Mastercard must conform to local lending and credit regulations, and it sets franchise rules that establish baseline standards for safety, transparency and consumer protection.

“We strictly comply with regulatory requirements,” Chibber said, acknowledging that some partners may be more conservative in risk management than others. “But the credibility of the Mastercard promise is critical. And as the regulatory landscape evolves, we’ll continue to honor these obligations.”

Looking ahead, Chibber said she sees the future of BNPL, installments and payments more broadly converging into a seamless, embedded experience — one that removes friction for users and merchants.

In describing a blueprint for the next generation of payment flexibility, she highlighted Mastercard’s move toward innovations such as tokenization, biometric authentication and, in particular, the Mastercard One Credential. This new offering could let a single credential link to multiple payment options — credit, debit, BNPL — giving consumers a unified profile at checkout and minimizing the need to toggle between different accounts or financing offers.

“Embedded is the way to go,” she said. “The consumer won’t accept friction or separate siloed journeys. It’s going to be more connected, more invisible, more convenient.”

Chibber’s perspective reveals a network embracing a fluid ecosystem in which digital commerce blends with embedded finance. As BNPL matures and seeks opportunities beyond consumer retail, Mastercard’s unified approach — folding installments into the core network, using franchise rules, emphasizing partner collaboration and adopting emerging technologies — aims to meet the demand for flexible, transparent payments.

Companies in industries from healthcare to home improvement to B2B distribution — the thinking goes — may soon view BNPL as standard rather than novel, just another payment option with the safety net of a major network behind it.

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