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MasterCard will offer lenders a buy-now, pay-later option.

MasterCard will offer lenders a buy-now, pay-later option.
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MasterCard will offer lenders a buy-now, pay-later option.

MasterCard will offer lenders a buy-now, pay-later option.

The country’s largest retailer Amazon recently launched a partnership with Affirm, which will offer payment options for the latter. And Square, the payments firm run by Twitter Chief Executive Officer Jack Dorsey, in early August agreed to acquire Afterpay, another provider, for $29 billion, a deal that cuts through the process of selling through Square’s app. Will open installment payments to millions of small businesses

Visa, another payment processor, said it has collaborated with several pay-later companies to help expand and introduce new products, including virtual cards. Visa also provides the technology to the commercial bank which provides installment payment options to certain Visa cardholders. Visa said it hopes to expand that program to more issuing banks next year.

Pay-later options still account for only 1.7 percent of online sales in the United States, according to payment processing firm, Worldpay, a segment dominated by credit cards, up 30.4 percent last year.

But the pay-later share is expected to nearly triple to 4.8 percent — or $79.7 billion — of US sales by 2024, Worldpay estimates. They are already more established overseas: the latter account for 23 percent of online transactions in Sweden and about 20 percent in Germany, and the method is also popular in Australia, Finland, New Zealand and Norway.

MasterCard’s program will provide consumer protections typically associated with credit cards, including zero-liability fraud protection and the ability to challenge unrecognized charges, the company said.

“Mastercard is a trusted brand, as are its bank partners, and it means a lot to consumers,” said Ms. Schmeltzer. “That being said, brands like Klarna and Afterpay have a large and growing – and apparently very loyal – consumer base. This is going to be a very interesting race to watch.”

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