Mastercard and LoanPro have collaborated to introduce a card-based lending solution called Loan on Card. This innovative product allows lenders to extend loans directly to consumers and small business borrowers through both virtual and physical Mastercard cards.
A Solution for the Future
The program, set to launch in 2026, aims to provide borrowers with instant access to funds that can be used wherever Mastercard is accepted. By leveraging Mastercard’s global payments network and Installments Program, Loan on Card combines the reliability of installment loans with the convenience of card-based transactions.
Borrowers will have the flexibility to use their funds both online and in physical stores, paying back the loan through fixed-term installments without revolving balances. This method not only offers lenders better control over loan distribution but also enhances borrower access to capital.
Transforming Lending Practices
This partnership marks a departure from traditional Automated Clearing House (ACH) transfers, which can be slow and inflexible. Embedding loans into card-based experiences simplifies the borrowing process, aligning with trends seen in other financial sectors where digital solutions have gained prominence.
Lenders will issue fixed-term installment loans through Mastercard Installments credentials, automatically linked to a mobile wallet for borrowers. This setup supports seamless transactions and transparent repayment schedules, contributing to improved client relationships and potential integration with loyalty programs.
Market Implications
In the US alone, small business lending markets amount to over USD 600 billion annually, with approximately 60% of loans processed via traditional bank channels using ACH transfers. Digitizing loan disbursements through card-based solutions could significantly streamline this process, providing near-instant access to funds.
Similarly, the consumer installment lending market has seen rapid growth, with global BNPL transaction volumes expected to reach over USD 911 billion by 2030. Integrating loans into widely used card networks could capture a significant portion of this expanding digital lending landscape, ensuring both speed and security while adhering to regulatory standards.
