SINGAPORE (THE BUSINESS TIMES) - Mastercard has launched a buy now, pay later (BNPL) commercial card to provide more flexible financing options for small businesses in the Asia-Pacific, riding on the global boom of the consumer-oriented BNPL industry that is set to exceed US$1 trillion (S$1.35 trillion) in annual gross merchandise volume by 2025.

In an industry first, the new Pay & Split card will enable commercial cardholders to convert any purchase from 80 million merchants worldwide where Mastercard is accepted into monthly or periodic instalments.

Businesses can easily make instalment finance purchases from suppliers around the globe and better manage cash flow, while eliminating the hassle of managing fragmented payment plans, said the payments giant in a statement on Tuesday (Nov 9).

Interest in commercial BNPL products is especially high in Singapore, where 80 per cent of respondents surveyed by Mastercard expressed interest in using an instalment product specifically created for small businesses, and India, where 77 per cent expressed interest.

Taking a global view, 75 per cent of those owning small and medium-sized enterprises who have used instalments for personal purchases said that they would be likely to adopt similar payment solutions for their business.

During the pandemic, accessing credit or finding loans with favourable lending conditions has been a challenge for many small businesses, especially those that lack the financial record that more established businesses typically have.

To that end, Pay & Split will also offer a path for smaller companies to build a credit history.

"Many small business owners rely on personal lines of credit or non-bank lenders to help finance their operations, which is not ideal in terms of sustainable business growth. Pay & Split brings new credit opportunities to smaller operators who may not meet certain thresholds for a traditional commercial credit card or term loan, but need working capital to stay afloat or expand," said Mr Sandeep Malhotra, Mastercard's executive vice-president of products and innovation in the Asia-Pacific.

It also opens the door for businesses to generate a credit rating, which can then be used to apply for more sophisticated credit products as the business grows, he added.