Count transactional credit at the point of sale among the payment technologies winning more of the spotlight as consumers tentatively venture out and businesses reopen in the midst of Covid-19’s impact. Mastercard Inc. on Wednesday announced new integrations with the card-issuing processor TSYS and with technology providers that will let cardholders elect installment payments before, during, or after a purchase.
And, in related news, online installment startup Sezzle Inc. is venturing into the physical point of sale with a virtual card issued on the Marqeta platform and usable through the Google Pay and Apple Pay mobile apps.
Mastercard says that, with its new program, TSYS is the first processor to enable issuers to offer installment-payment options to cardholders. The processor last year became part of the big acquiring processor Global Payments Inc.
The big payment network cites research it released in April indicating almost 75% of cardholders prefer installment-payment options be delivered via a card they already hold. It says its research also indicates the same proportion of U.S. citizens who have tried installment payments for the first time since the pandemic started intend to continue using the option when it is over. Typically with installment options, consumers can split a purchase into payments over a relatively short period of time without interest.
“Our installment solution addresses the growing consumer demand for payment optionality,” said Gaylon Jowers, president of TSYS Issuer Solutions and senior executive vice president of Global Payments, in a statement.
Mastercard has merchant connections for buy now, pay later offerings through Vyze , an installment-payment technology company it acquired in April 2019. And the network has extended its merchant reach through an agreement with Jifiti Inc., which offers a digital private-label prepaid card designed for installment payments and offered in Europe as well as North America. Other tech partners include Splitit in several global markets, Divido in Europe, and Pine Labs in the Asia-Pacific region.
With the new program, cardholders are able, before making a purchase, to set payments over time for purchases exceeding a dollar threshold. Or they could make the purchase but then elect to split it into installments. Or, sometime after the sale, they can choose to split the purchase into installments by responding to a notice from the issuer. The last option relies on TSYS’s digital-engagement platform and its APIs.
The installment-payment opportunity began to attract both major payment networks even before the onset of Covid-19. Visa Inc. announced a year ago it would introduce early this year APIs that link to Visa issuers and let merchants offer installment options to cardholders at the point of sale
With or without research, other players in the installment-payment market sense the same opportunity. Minneapolis-based Sezzle is looking to greatly expand its market reach with a virtual card that makes the company’s pay-later offering available for the first time in physical stores that enable transactions via Apple Inc.’s Apple Pay and Google’s Google Pay wallets.
“As traditional, in-store retail re-emerges, it’s critical that we support our merchant partners by giving them new tools to jump-start sales, both online and in-store,” said Killian Brackey, Sezzle’s chief technology officer and a cofounder of the company, in a statement.
Amid financial fears stemming from the pandemic, 4-year-old Sezzle says it attracted 325,000 new users in the second quarter, up 326% from the same period last year.