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The concept of paying by installments is simple. Financial technology companies (fintechs) encapsulate it with their catchy buy now, pay later (BNPL) moniker. After all, it’s just layaway or layby in the digital age.

The reality is more complex.

A broad definition might apply BNPL to fintechs and installments to issuing banks (issuers), but overlapping approaches mean the distinction doesn’t really work.

It pays to have clarity.

Globally, 19% of consumers report using installment plans as a payment method, and 50% are likely to consider using them in the future. The percentages are higher with millennials at 22% and 59%.1

This report breaks down installments by adding some precision to installment terminology and addressing the fintech–issuer balance. It then offers four data-informed building blocks to help construct a solid installments proposition.

1 Research conducted Feb 26 – Mar 10, 2021 by the Harris Poll and Mastercard Global Foresight, Insight & Analytics across nationally representative samples via online interviews of 15,569 consumers in 18 countries in four regions worldwide (1,000+ respondents per country in Australia, Brazil, Canada, Egypt, India, Kenya, Mexico, Nigeria, Saudi Arabia, South Africa, Thailand, UAE, US; 500+ respondents per country in Argentina, Chile, Colombia, Dominican Republic, Peru).

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