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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: nortonrsx/iStock/Getty Images September 28, 2021 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Meredith Hoffman is a personal finance writer covering credit card news and advice at Bankrate. She is originally from Columbia, S.C., and received her bachelor's degree from the Univ. of North Carolina at Wilmington. Before joining Bankrate in October 2019, Meredith worked as the news editor of Wilmington’s local newspaper, The Seahawk. Brady Porche is an editorial director for Bankrate Credit Cards and CreditCards.com. He has two decades of professional experience as a writer and editor. Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Bankrate logo

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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Mastercard announced on Sept. 28 it’s wading into the deferred payments business with its flagship “Buy Now, Pay Later” program. Buy now, pay later (BNPL) has become a trend in recent years with fintech companies like Klarna and Affirm, allowing consumers to break up purchases into interest-free installments. BNPL programs vary in execution, but most offer a similar model. Businesses partner with BNPL companies, which then facilitate a payment plan at the end of a transaction. For example, if a consumer makes a large purchase at an electronics store, they may be offered an option at checkout to break their purchase up into four interest-free installments. The customer won’t be charged any additional fees if they pay the installments back on time and in full.

The future of credit cards meets deferred payment programs

According to Mastercard, its will provide consumers with a “seamless experience” that offers “more payment options wherever they shop.” The new program won’t require consumers to go through additional steps at the end of their transaction and is backed by Mastercard’s zero liability protection. “The line between credit cards and buy now, pay later is getting increasingly blurry,” explained Bankrate’s senior industry analyst Ted Rossman. “Many consumers are drawn to instant gratification, easy access and predictable installments.” Mastercard believes its new BNPL program will benefit not only consumers but also merchants and lenders. Mastercard offers merchants and small businesses a way to quickly enter the buy now, pay later ecosystem without the burden of upfront costs or liability of going it alone in a relatively new payment environment. For consumers, the benefit of BNPL comes in the form of convenience. For merchants, Mastercard promises security and scalability. “The blending of the physical and digital is a huge trend in retail,” says Rossman. “Buy now, pay later companies have done a great job selling their solutions to merchants. Even though they generally charge higher processing fees than credit card issuers, buy now, pay later companies have gotten merchants to buy in on a narrative that they sell more stuff when they offer buy now, pay later to their customers.”

The bottom line

If current trends are any indication, buy now, pay later systems are here to stay. “Affirm has announced plans for a debit card, whereas traditional financial institutions such as American Express, Chase, Citi, Goldman Sachs, Visa, Capital One, Bank of America and Wells Fargo are in various stages of implementing or considering pushes into buy now, pay later,” says Rossman. “We’re getting closer to a moment in time when buy now, pay later could be considered less of a category unto its own and more of a common, everyday payment method.” SHARE: Meredith Hoffman is a personal finance writer covering credit card news and advice at Bankrate. She is originally from Columbia, S.C., and received her bachelor's degree from the Univ. of North Carolina at Wilmington. Before joining Bankrate in October 2019, Meredith worked as the news editor of Wilmington’s local newspaper, The Seahawk. Brady Porche is an editorial director for Bankrate Credit Cards and CreditCards.com. He has two decades of professional experience as a writer and editor. Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer.

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