Retailers Bristle at Mastercard Installment-Payment Terms

A new 3% purchase-price charge from Mastercard when customers use a new installment-payment plan has angered some retailers, a Bloomberg report said, which notes that retailers will be enrolled in the program automatically but will be able to withdraw.

While some retailers have objected to the fees, others have indicated support because the 3% charge is less than other companies that enable retailers to offer stand-along BNPL options charge, according to the report, which also notes that most fast-food retailers and gas stations have opted out of service since their purchases are frequently below the program’s $50 threshold.

“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 Mastercard, told Bloomberg via email, according to the news outlet. “When we built our program last year, we were deliberate in enabling another seamless and transparent way to pay, with the same levels of trust and security that’s expected from Mastercard.”

Retailers increasingly are complaining about the fees they are charged for accepting electronic payments, Bloomberg reported, noting that the fees in 2021 exceeded $130 billion according to one data source.

See also: 71% of Affluent BNPL Users Increased Their Use in Last 12 Months

The universe of shoppers using BNPL programs has expanded as of late to include more shoppers who are affluent in addition to those with lower incomes.

Among retailers that have opted out of the new Mastercard offering are operators of gas stations, convenience stores and fast food eateries concerned customers will resent making payments over time, Bloomberg reported.

“This carries all kinds of new dimensions that go beyond the frustrations with credit cards,” Doug Kantor, general counsel for convenience-store trade group NACS, reportedly told Bloomberg. “It’s definitely a source of frustration. Nobody should be automatically opted into any service in this context. And, frankly, the service that they’re offering doesn’t make sense for lots of retailers.”