Consumers demand more choice & control over how they check out

Today’s consumers are at the forefront of embracing technologies that offer convenient and personalized experiences. Gen Z, the generation spanning teenagers to those in their mid-twenties, is leading the charge. Instead of juggling between different cards and payment methods, they are looking for an innovative digital solution to manage their payments today and plan for tomorrow. They want their financial life at their fingertips and a simple way of accessing multiple funding options. To meet these needs, Mastercard is launching Mastercard One Credential, a single digitally connected credential with multiple ways to pay. 

Introducing One Credential 

With One Credential, consumers will be able to choose the payment option (which may include debit, installments, prepaid and credit) that’s best for them, all through a seamless digital experience.    

Here’s how it works. Imagine a financially independent consumer in her 20s named Erica. With One Credential, Erica can tailor her payment preferences, so they’re optimized for her household expenses. She can choose to pay for daily expenses under $100, like groceries and fuel, from her checking account; charge expenses over $100 to credit; and pay for the occasional larger purchase via installments. Erica can set her preferences online or in an app, with full control over how each transaction is funded and a holistic view of her spending.  

“Today’s consumers expect to be in the driver’s seat,” said Jorn Lambert, chief product officer, Mastercard. “That’s what sparked One Credential. It gives people an innovative way to pay that’s truly personalized to them. While Gen Z may be leading the way, the desire for personalization spans generations.” 

Excitement for One Credential is clear, with key customers and partners already committing to help bring the solution to consumers: 

• Bendigo and Adelaide Bank group that includes Bendigo Bank, Australia’s most trusted bank and Up, Australia’s leading digital bank.

• Episode Six, a leading global provider of enterprise-grade payment processing and ledger infrastructure.

• Galileo Financial Technologies,  a leading financial technology company owned by SoFi Technologies, Inc.

• i2c, Inc., a leading provider of banking and payments technology.

• Lithic, a leading financial technology platform known for powering growth businesses with bespoke card solutions and seamless money movement.

• Marqeta, the global modern card issuing platform that enables embedded finance solutions for the world’s innovators.

• Wio Bank, One Credential is currently live in the UAE with Wio Bank, a leading digital banking platform. 

Gen Z: Digital Natives Who Crave Choice & Control  

Compared to previous generations, Gen Z’s payment preferences are distinct in key ways: 

• Born as digital natives, Gen Z’s payment appetite is largely digital. According to Mastercard’s latest research, nearly half1 of Gen Z consumers prefer using new and innovative methods of payment, and 65 percent2 want to manage everything in one place online.

• Despite seeing themselves as financially cautious, Gen Zers tend to spend more than save and are more mindful of their purchases, seeking personalized solutions.3 Compared to other generations globally, personalization is 1.31 times4 more important to Gen Z consumers when choosing a payment method.

• Gen Z consumers aspire to build wealth and actively seek out financial education online. In the US, Gen Zers believe they need financial assets totaling more than $9 million, almost double that of Gen X’s goal. To meet their goals, 73 percent5 of teens surveyed say they want more personal finance education and the majority have received advice from social media.  

Taken together, these insights show a generation that wants their financial life at their fingertips and is eager to embrace innovative tools as they plan for their futures. 

Bridging the Credit Gap 

Despite Gen Z’s aspirations and preference for digital wallets6, they have the lowest average credit score of all generations in the US, largely a function of thinner credit files and a reluctance to use traditional forms of borrowing. Just half7 of Gen Z consumers currently use credit, the lowest credit usage among all generations. Accessing credit responsibly helps consumers build a positive credit history, which is crucial for future milestones such as renting an apartment, buying a car, or getting a mortgage.  

Nearly 70 percent Gen Zers are actively trying to increase their credit score, but more than half don’t know where to start. Gen Z needs new digital tools that offer a path to credit worthiness and financial health, while empowering them with choice and control along the way. 

A Stepping Stone to Financial Health 

Structured credit, such as installments, gives consumers another choice in how they pay, and is especially appealing to younger consumers finding a path to credit worthiness. By providing structured credit alongside debit, Gen Z consumers can better manage and control their finances based on their needs. 

A Look Ahead 

For issuing banks, One Credential provides a differentiated offering that is especially appealing to younger consumers who seek digital, personalized payment experiences and are planning their financial futures. Mastercard also plans to roll out One Credential for small businesses, empowering them with more choice and control over how they pay.  

One Credential is designed so that consumers and small businesses using it can access even more funding options and set payment preferences around transaction type and time – all with a single, digitally connected credential. To learn more, visit: Mastercard One Credential’s homepage.   

One Credential is Supported by Key Partners Around the World  

Being first to market with Mastercard’s One Credential allows us to deliver exactly what our digitally native customers demand - complete payment flexibility and control at their fingertips. This digital-first solution allows customers to seamlessly switch between payment methods based on their needs - whether debit for daily expenses, credit for larger purchases, or installments for significant investments. We’re transforming how customers manage their finances by delivering what matters most: choice, control, and simplicity in every transaction" said Prateek Vahie, chief commercial officer at Wio Bank. 

At Marqeta, we are excited to be working with Mastercard to implement One Credential. Our customers want to take advantage of the latest Mastercard innovation which truly delivers value and meets the diverse needs of today’s consumers and businesses. By seamlessly integrating One Credential, we can help our embedded finance customers put control and flexibility directly in the hands of consumers, increasing engagement and enabling exceptional financial experiences every day" said Rahul Shah, chief product & engineering officer of Marqeta.  

We’re excited to partner with Mastercard on the launch of One Credential, a solution that aligns with our commitment to making card issuing and payment solutions more accessible and intuitive,” said Bo Jiang, CEO of Lithic. “This partnership plays a key role in delivering the flexible, personalized payment experiences that today’s digitally native consumers expect.” 

Amir Wain CEO of i2c Inc. said: “This partnership with Mastercard exemplifies our commitment to driving innovation in the payments ecosystem. By leveraging Mastercard One Credential and our cutting-edge technology, we’re empowering issuers to deliver exceptional experiences for their customers.” 

At Galileo, we are thrilled to collaborate with Mastercard on their One Credential solution. This cutting-edge innovation allows us to offer unrivalled simplicity and flexibility to our customers, addressing their ever-evolving payment needs. By adopting One Credential, in turn we are supporting our customers in setting new standards of convenience, optionality and security in every transaction,” said Derek White, CEO of Galileo Financial Technologies. 

At Episode Six we are proud to integrate Mastercard’s One Credential into our offerings. This state-of-the-art technology not only enhances security but also provides our customers with unparalleled simplicity and customization in their payment methods. Our mission is to continually innovate and differentiate ourselves by meeting the varied needs of our customers, and ultimately today’s discerning consumer,” said John Mitchell, CEO of Episode Six.

About Mastercard

Mastercard powers economies and empowers people in 200+ countries and territories worldwide. Together with our customers, we’re building a sustainable economy where everyone can prosper. We support a wide range of digital payments choices, making transactions secure, simple, smart and accessible. Our technology and innovation, partnerships and networks combine to deliver a unique set of products and services that help people, businesses and governments realize their greatest potential.

www.mastercard.com