Accepted by 80 million merchants worldwide, the card-led instalments product will empower small businesses to get capital as they gear up for post-pandemic recovery. —Photo Mastercard
With the consumer-oriented “Buy Now, Pay Later” (BNPL) industry set to exceed US$1 trillion in annual gross merchandise volume globally by 2025, Mastercard launched a new commercial card offering designed specifically for small and medium enterprises (SMEs) on November 15.
Called Mastercard Pay & Split, it enables financial institutions to provide small businesses with a payment product that is the first-of-its-kind, a network-based, open-loop instalment solution that will be available anywhere in the world.
Now available to issuers across the Asia Pacific region, the card-led product will address the demand for flexible financing options among underserved businesses and will help to rekindle growth among the region’s countless smaller operators during a period of continued economic uncertainty.
“Financing has always been a hurdle for small businesses, but the economic impacts of the pandemic have really brought this issue into sharp focus,” said Sandeep Malhotra, Executive Vice President, Products & Innovation, Asia Pacific, Mastercard.
“Many small business owners rely on personal lines of credit or non-bank lenders to help finance their operations, which is not ideal in terms of sustainable business growth. Mastercard Pay & Split brings new credit opportunities to smaller operators who may not meet certain thresholds for a traditional commercial credit card or term loan, but need working capital to stay afloat or expand.”
Mastercard’s new commercial product has been tailored for the unique needs of small businesses, enabling cardholders to convert any purchase from 80 million merchants worldwide where Mastercard is accepted into monthly or periodic instalments. With Pay & Split, businesses can easily make instalment finance purchases from suppliers around the globe and better manage cash flow, while eliminating the hassle of managing fragmented payment plans.
In the Asia Pacific region, enthusiasm for commercial BNPL products is strong amongst small businesses. Interest is especially high in India and Singapore where 77 per cent and 80 per cent of respondents respectively expressed interest in using an instalment product specifically created for small businesses, according to a Mastercard-commissioned survey conducted in 2021. Taking a global view, 75 per cent of SME business owners who have used instalments for personal purchases said that they would be likely to adopt similar payment solutions for their business. — VNS