Mastercard Inc. is wading into the buy-now, pay-later movement as consumers adopt a more nuanced view of credit purchases.
The company announced Tuesday that it has acquired Vyze, a business that lets merchants offer financing options from various lenders both online and at the point of sale. Terms of the deal weren’t disclosed.
While Vyze isn’t a lender, it connects merchants with various lending options. Blake Rosenthal, Mastercard’s MA, +0.13% vice president of global acceptance, told MarketWatch that the platform is attractive to merchants because it lets them add multiple lenders with a single integration and is attractive to consumers because the various options for installment purchases increase the probability that they are approved for financing.
“What it provides for consumers is additional choice at the point of sale, which is very consistent strategically with how we are thinking of things,” Rosenthal said. She expects that Mastercard’s existing relationships with merchants and lenders can help the Vyze platform grow.
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Vyze currently works with lenders like AllianceData and FlexShopper and merchants such as Home Depot Inc. HD, +0.50% and NordicTrack.
Installment purchases are back in vogue among millennials, who are using lenders like Afterpay and Klarna to split transactions into more manageable chunks, even for items that wouldn’t ordinarily have been layaway targets, such as clothing from Urban Outfitters Inc. URBN, -0.10% and its suite of brands. Afterpay, which works with the Urban stores, offers no-interest solutions but charges late fees to those who don’t pay on time. Klarna, which counts Visa Inc. V, +0.50% as an investor, works with companies like Sonos Inc. SONO, +0.25%
Mastercard shares have gained 22% over the past three months, as the S&P 500 SPX, -0.06% has risen 11%. The company is scheduled to report earnings on April 30.
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