Mastercard announced today that it has teamed with Divido, a multinational white-label platform for point-of-purchase lending, to offer online checkout financing for customers of U.K. travel site lastminute.com.

According to Mastercard, the flexibility of POS financing is particularly attractive to those faced with large-ticket purchases such as travel arrangements, as they are able to spread out the cost with clearer borrowing terms that allow customers to budget and plan. Divido added that its platform provides instant access to credit by connecting shoppers to multiple lenders at the moment of purchase, whether that takes place online, on payment-enabled devices or in store.

In the case of lastminute.com, a customer applies for financing as part of the checkout process by providing personal information and selecting the desired loan term. The loan application is sent to credit intermediary Fly Now Pay Later via API and, if approved, the consumer checks out as normal. Monthly payments are automatic and transparent.

“Retailers that want to capture and convert more of their customers need to constantly evolve their offering to stay relevant and ahead of the competition,” Christer Holloman, CEO of Divido, told Bank Innovation. “Offering customers more ways to pay is just one such example.”

Asked what his company’s differentiator is from other firms in the POS lending space, Holloman said Divido lets retailers connect with multiple lenders in multiple countries via a single integration. “The alternative is that the retailer connects directly with each bank for each market individually,” he said.

A Mastercard spokesman said the relationship with Divido dates back to the fintech’s participation in Start Path, payment processor’s accelerator program. He noted that Divido works with other entities as well and that the partnership with lastminute.com is their first collaboration outside the accelerator. Divido added that it works with more than 1,000 partners, including Mastercard, HTC, BMW and BNP Paribas.

“We are always looking for innovative ways to deliver seamless payment options for consumers and value-enhancing solutions for our retail partners,” Zahir Khoja, senior vice president of Global Acceptance at Mastercard, said in a statement. “Our partnership with Divido and lastminute.com gives travelers greater flexibility to book and pay when convenient for them.”

With the lastminute.com offering, Mastercard is continuing its global investment strategy in retail financing solutions through partnerships. In April, it acquired Vyze, a platform that connects customers shopping in-store and online to a range of different purchase financing options at checkout. Its clients include brands like Home Depot, Microsoft, HTC and Samsung.

Other big financial players, like JPMorgan Chase, are taking an in-house approach to POS financing. In February, the bank unveiled a new financing option, dubbed “My Chase Loan,” which allows card customers to borrow against credit lines to fund larger value items. Customers can apply for the loan through the bank’s mobile app and have the funds immediately transferred to their checking accounts.

The rise of POS financing?

Consumer credit reporting agency TransUnion’s Industry Insights Report for 1Q19, released last week, said POS loans are shaking up how consumers finance large purchases and eating into plastic cards’ dominance of the consumer credit market.

Issuance of new private label cards experienced a decline of 5.5% between the fourth quarter of 2017 and the fourth quarter of 2018, the ninth straight quarter of yearly decreases, the report found. As of the first quarter of 2019, 120.6 million consumers had access to a private label card, down from 126.5 million just one year earlier, but consumers with access to a bank-issued credit card increased from 174.9 million to 179.5 million over the same period.

“As brick and mortar retailers continue to face challenges, many merchants are implementing point-of-sale financing alternatives as a potential new avenue for growth,” Paul Siegfried, senior vice president and credit card business leader at TransUnion, said in a statement. “In addition, consumers are increasingly opting to cash in on their preferred credit card reward program rather than apply for a new private label card.”