Mastercard has stepped into the buy now pay later (BNPL) space with its own offering amid a boom in the sector.
The payment provider is allowing customers to pay in installments for purchases made online and in-store, interest-free.
The service will be available in markets in the US, UK, and Australia.
Consumers will also be able to access offers digitally, which are pre-approved through the lender’s mobile banking app, or instantly at checkout.
The BNPL space has gathered momentum during the pandemic as more and more consumers were pushed to buying online.
Leaders in the space include Klarna, Clearpay, and Afterpay, which was recently acquired by Jack Dorsey’s Square for $29 billion.
Payment provider PayPal has also recently announced it will acquire Japanese BNPL firm Paidy in a $2.7 billion deal.
BNPL schemes are popular with customers as they offer a means of purchasing bigger-ticket items over interest-free installments which bypass credit checks.
However, if a buyer misses a payment, it can stay on their credit record for at least six years.
Other companies are looking into the feasibility of releasing their own products, including Apple and Goldman Sachs.
However, there are concerns that it is creating a new demographic of debtors.