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Mastercard is facing pushback from retailers over a new product that allows customers to pay off their purchases in installments. The payments giant has begun telling merchants and their banks that it will charge retailers 3% of a purchase price each time a consumer opts to use the new program.
The price tag came as a surprise to some of the country’s largest retailers, many of which have already negotiated separate deals with credit-card issuers and buy-now, pay-later providers that may limit them from offering competing services to their customers. Others, however, are embracing the new service, given that the 3% cost, while higher than any of Mastercard’s normal rates for accepting credit cards, is less than what most standalone buy-now, pay-later providers charge for their products. “The promise of BNPL will fully be realized when everyone benefits -- lenders, merchants and, ultimately, the consumer,” Chiro Aikat, executive vice president for products and engineering at Purchase, New York-based Mastercard, said in an emailed statement.
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