British shoppers will soon be able to decide to spread the cost of a purchase over a series of monthly instalments at the point of making a payment with their credit card, in a new partnership between Mastercard Inc and card machine maker Verifone Systems Inc.
The "Mastercard Instalments" app - the first of its kind in Britain - will launch on Verifone payment terminals at some UK retailers in January, and will then be rolled out to other shops across the country.
Customers who have been deemed eligible by their banks will be given the option of paying for their purchases in fixed instalments at the point that they insert their card into a payment terminal. They will also be advised of the interest rate they will be charged, in line with the terms of the loan.
"For the merchant it's an interesting value proposition because we're saying: we're going to give your customers a new way of financing their purchase that's private - they don't need to talk to anybody or do any credit checks," Verifone commerce enablement and innovation vice president Nathan Gill told Reuters at the sidelines of the Trustech conference in Cannes.
"It’s very simple: they put in their Mastercard, they’re given an offer in real-time, and they can decide whether to accept it or not," he added, saying he expected the app would lead to more purchases being made, of a higher value.
The app will be launched on what Verifone calls its "Commerce Platform", which sits inside its payment terminals and allows fintech firms such as China's Alipay and other developers to build payment apps.
"Just like in the mobile space, when applications started helping you with every element of your life, when it comes to payments, you’re now going to have apps that assist you with those," said Gill.
"The functionality that you'll now have on payment terminals is now going to increase exponentially."
Mastercard Instalments has already launched in Romania in a partnership between Mastercard and Romanian bank BRD–Groupe Société Générale. But this is the first time Verifone has offered a financing service.
"Verifone’s payment devices are used all over the country, so this is a big step forward," said Mastercard UK & Ireland President Mark Barnett. "We believe consumers will welcome this new way to pay, by easily spreading the cost of expensive items."
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