Mastercard faces retailer backlash over installment payments – Bloomberg

Mastercard Inc. is facing pushback from retailers over a new product that allows customers to pay off their purchases in installments, according to Bloomberg. 

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. Retailers will be automatically enrolled for Mastercard’s new buy-now, pay-later service, though they will have a chance to opt out. 

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.

“This carries all kinds of new dimensions that go beyond the frustrations with credit cards,” Doug Kantor, general counsel for NACS, a trade group representing the convenience-store industry. “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.”