By Roy Urrico
Mastercard recently announced One Credential, a single digitally connected option that gives consumers multiple ways to pay, including credit, debit, prepaid, or buy now, pay later (BNPL). i2c Inc., a provider of banking and payments technology, signed on to be one of the first issuing processing partners for Mastercard One Credential.
Seth Perlman, global head of product at the Redwood City, Calif.-based i2c provided Finoptamus with a quick background on Mastercard One Credential, i2c and how credit unions can engage to offer this payment vehicle.
Mastercard One allows consumers to determine the funding of different transactions. “For instance, a credit union member could choose to have daily expenses under $100 deducted from their share draft account, while larger purchases are charged to a credit line or set up as installment payments,” explained Perlman. Members can manage these preferences through the credit union’s app or online account management website, he added.
i2c, noted Perlman, is among the first issuer processors that will provide the necessary infrastructure and Mastercard network integrations for financial institutions to bring this offering to their customers. “Our highly configurable, API-driven platform enables seamless adoption of Mastercard One, allowing credit unions to offer a unified and personalized payment experience to their members.”
Helping Issuers
i2c helps issuers such as credit unions and other financial institutions integrate multiple payment types — credit, debit, BNPL — onto a single channel. “For credit unions, adopting Mastercard One presents an opportunity to enhance member engagement by offering pre-configured controls for how transactions will be settled to member accounts,” said Perlman. “This requires an issuer to offer a single control panel that then speaks to the underlying issuer processing platform – or platforms – for credit, debit, and other account types.”
i2c addresses this need by providing a single platform for issuing all types of card products and spending accounts to their members, which according to Perlman, greatly simplifies the ability to add Mastercard One Credential as a feature of their programs. “i2c provides the platform that enables credit unions to encourage members to consolidate their financial activities with the credit union, increasing share of wallet and fostering loyalty.”
BNPL Will Evolve
“The BNPL landscape is evolving due to increasing regulatory scrutiny and changing consumer expectations,” said Perlman. He noted regulators advocate for clearer disclosures and stronger consumer protections, prompting BNPL services to transition from standalone offerings to integrated features within traditional financial products.
“Mastercard One creates the flexibility for issuers to embed BNPL options into a member's existing payment credential,” said Perlman. “This allows members to set rules for which transactions should be funded with an installment plan, enhancing accessibility and convenience while aligning BNPL offerings with established lending standards.”
Mastercard One Automates Payment Decisions
Mastercard One automates transaction routing based on preset, member-defined preferences, indicated Perlman. These preferences, contained in a set of preconfigured rules used to process transactions in real time during the authorization request, ensure the appropriate funding source of transactions without manual intervention.
i2c's platform facilitates this automation by managing the member’s ability to set rules, communicating those rules to the network, and applying the resulting transaction routing logic at the time of authorization.
“When a member initiates a payment using their Mastercard One credential, i2c's system evaluates the pre-established preferences and seamlessly books the transaction against the designated payment method, reducing friction at checkout and enhancing the user experience,” said Perlman.
Helping Members and Credit Unions
For members, Mastercard One simplifies payments by removing the need to carry multiple cards or make manual decisions at checkout, suggested Perlman. “With pre-configured payment rules, transactions are automatically routed according to the member's preferences, such as using debit for small, everyday purchases and transitioning larger expenses onto a credit line. This system not only streamlines the payment process but also provides greater control over personal finances, meeting consumer demands for convenience and flexibility.”
By offering a unified payment solution that puts full control in the hands of their members, credit unions can deepen member engagement and loyalty, noted Perlman. “Members are more likely to consolidate their financial activities within a single institution that can meet all their payment needs and provide innovative, user-friendly functionality.”
Perlman suggested credit unions could also realize operational efficiencies, as managing a single, versatile credential simplifies back-end processes. “i2c's technology enables these benefits without requiring extensive changes to existing banking infrastructure, making it a practical solution for credit unions aiming to stay competitive in a rapidly evolving market.”
Simplifying Digital Payments and Reducing Cash Usage
The shift toward digital payments is accelerating, driven by consumer demand for greater choice, control, and convenience in how they pay, said Perlman. He referred to Mastercard’s 2024 Payments Index, which found 47% of Gen Z prefer using new and innovative payment methods, while 65% want to manage everything in one place online.
“In 2023, contactless payments accounted for more than two-thirds of in-person transactions, while projections indicate that the total user base for digital wallets will grow from 3.4 billion in 2022 to 5.2 billion by 2026, encompassing over 60% of the global population,” said Perlman. “This demand is reshaping financial services, pushing institutions to offer seamless, personalized payment experiences that reduce the reliance on cash.”
Continued Perlman, “By streamlining multiple payment options into one credential, Mastercard One simplifies the payment experience, making it seamless and reducing the reliance on cash for everyday activities.”