Walgreens and other brands join Mastercard Instalments

The card network's presence increases competitive pressures by making it harder for players like Affirm, Afterpay, and Klarna to stand out. Mastercard added H&R Block, i2c, Walgreens, and other partners to Mastercard Instalments, the Buy Now, Pay Later programme it announced in September 2021.

The programme lets the card network's merchants offer BNPL options, including pay-in-four interest-free instalment plans, through a direct integration into their platforms. Customers can apply at the POS or with banks, lenders, and other financial institutions (FIs) like Synchrony and SoFi. They can get instantly approved at checkout or be pre-approved through their lender's or FI's mobile app, which can then be stored in their digital wallets and used wherever Mastercard is accepted.

The company can rely on its reach to scale its BNPL programme and drive volume. The card network has 78 million merchants in its acceptance network, as per PYMNTS. The programme's simple integration may be a key selling point for merchants since it lets them rely on their existing relationship with Mastercard instead of forging deals with BNPL firms.

Furthermore, Mastercard is well-positioned to weather anticipated BNPL regulation. The Consumer Financial Protection Bureau could update its regulations shortly after the deadline for receiving public comment on BNPL closes on 25 March 2022. Its underwriting capabilities and tie-ups with established banks could give its instalments solution a leg up on other BNPL providers that may have less room to pivot to accommodate new regulations.