Payment Solution – MasterCard Instalment Payment Plan
MasterCard has recently announced that it has joined Verifone Systems to launch a new application, called “MasterCard Instalments“. Which allows consumers to make a decision directly at the point of sale (POS) if they desire to pay for a transaction on a monthly instalment basis. This new form of Payment Solution is based on the resistance of “millennials” and other consumers to using credit cards. In addition to this, the latest research has indicated that many from this demographic view traditional forms of the credit card as likely to incur serious amounts of debt.
Major credit card companies have now had to seriously rethink how to engage with this demographic. To ensure that their products match the consumer’s concerns. However, the slow pace to fix this problem has created a vacuum. Therefore, allowing a forward-thinking start-up company called Affirm to first create a new payment solution. That allows consumers to split payments at POS for purchases ranging from £40 to £800+. This technology takes influence from equally successful new payment options provided by Pay Pal, called “Bill Me Later“.
The next payment solution option?
In an effort to match these successful and popular options, MasterCard has recently created a capability that allows it to rapidly enable clients to access interest-charging payment plans at POS. This option negates trying to sign up consumers to credit plans. Most noteworthy, the option does not require the approval of credit rating prior to credit being issued. This has proved to be incredibly appealing to new and young credit users.
By doing this MasterCard have potentially re-engaged with this demographic and considerably broadened its market base. Consequently, MasterCard may end up providing credit to too many of the wrong people that will be unable to pay back. Young consumers, in conclusion, may also feel that the option sounds too good to be true. Ultimately incur the same negative effects of traditional credit. This could become a costly error on MasterCard’s part.
In conclusion, the payments sector like most industries, is under immense strain and is required to rethink how it does business. The direct challenge from modern market entrants using new technology to take advantage of unseen opportunities; represented by companies like Pay Pal, Affirm, Apple and Google. Therefore, if these market giants do not think creatively to address consumer concerns, it is likely they will fall behind in developing the next payment solution option.