Mastercard and Pine Labs will launch their integrated “pay later” solution in five Southeast Asian markets, including Viet Nam early next year. — Photo courtesy of Mastercard

Mastercard and Pine Labs will launch their integrated “pay later” solution in five Southeast Asian markets, including Viet Nam early next year.

The solution aims to offer consumers the flexibility of zero-interest instalments on purchases, expand business for merchants and connect banks, fintechs, payment gateways and device makers to a rapidly growing financing alternative.

By combining the expertise and technology assets of Mastercard and Pine Labs, one of Asia’s leading merchant commerce platforms, the expansion adds to their existing “pay later” partnership in India and Malaysia that started in early 2020. The solution will be rolled out in Thailand and the Philippines in February, followed shortly by Viet Nam, Singapore and Indonesia.

“The ‘pay later’ option gives consumers the flexibility to manage their cash flow better by offering them the choice to pay in instalments at the point of sale. For merchants, being able to offer instalments at checkout directly influences consumer buying behavior that leads to an increase in the average ticket size, reduces cart abandonment and results in higher sales,” said Sandeep Malhotra, Executive Vice President, Products & Innovation, Asia Pacific, Mastercard.

Card-linked instalments are common on credit cards across Southeast Asia but the Mastercard and Pine Labs solution is much broader by enabling instalments via credit cards, debit cards and bank accounts across in-store and online merchants. Lenders and merchants benefit from the simplicity of a single access point into an instalments network that is easy to integrate and quick to scale.

With its fast-rising and digital middle class – plus more than half of the world’s consumer borrowing – the Asia Pacific region presents major opportunities for merchants, fintechs and lenders that offer shoppers the flexibility and convenience of spacing out payments on TV sets, appliances and other bigger ticket items. Mastercard research shows 43 per cent of consumers in the region would be willing to increase spending by at least 15 per cent if they were to pay in instalments.

The global “pay later” market is expected to grow from $7.3 billion in 2019 to $33.6 billion in 2027 at an annual rate of more than 21 per cent, according to a study by Coherent Market Insights. The market intelligence and consulting group sees Asia Pacific as the fastest-growing region.

In January this year, Mastercard also made an investment in Pine Labs, which processes more than US$30 billion of payments per year, serves about 150,000 merchants across 450,000 network points in South Asia, Southeast Asia and the Middle East and works closely with lenders and merchants to design and deliver the financing at checkout to consumers. — VNS