New Buy Now Pay Later Commercial Card Solution from Mastercard

Is the new Buy Now Pay Later commercial card solution from Mastercard just a sticking plaster to hide a much deeper rooted issue or could it really help businesses get paid on time? Mastercard has just announced a world-first Buy Now Pay Later (BNPL) card specifically aimed at SMEs. Join us as we take a look at the latest offering from Mastercard.

In a press release earlier this month Mastercard, global payments giant, announced a world-first solution to bring the BNPL bubble to SMEs for their own outgoing payments, rather than payments made to them. The BNPL industry is set to hit US$1 trillion by 2025 and so Mastercard has launched ‘Mastercard Pay and Split’ to tap into the business to business payments market.

Pay and Split has been launched across the Asia Pacific region, with plans to expand the offering globally. The card offers businesses the opportunity to make instalment payments on purchases for their business, at a time when access to financial support such as traditional business loans is becoming increasingly difficult. The card was launched off the back of global research commissioned by the giant in 2021. The research found that 75% of business owners who have used BNPL for personal purchases would happily use it for business purchases too.

The card will enable businesses to use the ‘Pay and Split’ Mastercard at any one of its 80 million worldwide merchants and turn the payment into instalments, with options for monthly payments, periodic payments and more. The hope is that the increased flexibility will help businesses with their cash flow. And, as we previously mentioned, with access to loans and other forms of business finance including traditional business credit cards becoming tricky, the ‘Pay and Split’ card will enable small businesses to build up a robust credit history.

This all sounds incredibly positive for SMEs, who are in desperate need of a break in the cycle of late payments. By receiving the full payment from Mastercard upfront then the many hours, stress and energy that is lost to chasing late payments can be eliminated. Providing they accept credit payments of course… And we’ve already mentioned the benefits to payees, in terms of being able to split large purchases into instalments and enabling better cash flow management.

But what happens when businesses over-extend themselves and end up facing large ‘Pay and Split’ bills at the end of the month? SMEs will need to keep a tight ship when it comes to tracking their expenditure on the card and knowing when payments are due. Could we see an influx of insolvencies as businesses add another liability to their list?

So, is the new Buy Now Pay Later commercial card solution from Mastercard just a sticking plaster? Honestly, the jury is still out at My Debt Recovery. We’re going to be following the rollout of the ‘Pay and Split’ card across the globe very carefully. We’re really interested to see some stats about the usage of the card and its benefits as it becomes more widespread and understand if it can help eliminate a large chunk of late payments. 

What are your thoughts? Will you be adding the ‘Pay and Split’ card to your business when it arrives in the UK?

If you’re one of the many thousands of businesses facing a huge backlog of late payments then reach out to our team today: contact us.