Mastercard and LoanPro announced a strategic partnership on December 16 to launch Loan on Card, a new disbursement mechanism that delivers fixed-term installment loans via Mastercard card credentials directly to borrowers' mobile wallets. Set to launch in 2026, the program positions itself as an alternative to traditional ACH disbursement by combining the structure of installment lending with instant, card-based fund access anywhere Mastercard is accepted.

Key developments:

• Disbursement Mechanics: Approved loans are delivered via a Mastercard Installments Credential, provisioned instantly to the borrower's mobile wallet by default, with optional physical card fulfillment

• Target Market: Consumer and small business borrowers across all asset classes—explicitly including alternative lenders, banks, and embedded-credit providers

• Lender Control: Lenders retain full control over underwriting, terms, fees, and customer experience; spend controls can be configured for open-loop, closed-loop, or merchant-specific programs

• Repayment Structure: Fixed installments with no revolving balance—borrowers repay on predictable schedules while accessing funds immediately

• Economic Claims: Mastercard and LoanPro position the product as offering immediate interest accrual, preserved float, and reduced servicing load compared to ACH-based disbursement

• Implementation Path: LoanPro will work with issuing banks and lenders participating in Mastercard Installments to enable the program rollout

Immediate implications: The 2026 launch timeline gives lenders roughly 12 months to evaluate integration requirements and conduct cost-benefit analysis. For high-volume alternative lenders, the key question isn't whether card-based disbursement is technically feasible—it's whether the economics pencil out when you're moving $50M+ monthly.

What Alternative Business Lenders Need to Know

What's Actually Happening Here?

Let's cut through the marketing. Mastercard and LoanPro are creating a new disbursement rail that wraps installment loans inside card credentials. Instead of pushing funds via ACH to a borrower's bank account (which takes 1-3 business days and costs roughly $0.25-$1.50 per transaction), lenders would deliver loan proceeds via a Mastercard Installments Credential—essentially a virtual card—that provisions instantly to the borrower's Apple Pay or Google Pay.

LoanPro isn't a small player in this space. They've raised $100M in Series A funding from FTV Capital, currently manage over $12 billion in loan balances across 3+ million loan accounts, and process more than $400 million in payments monthly. Their platform serves 600+ lenders across consumer, business, and embedded credit programs. When LoanPro announces a Mastercard partnership, the infrastructure exists to actually scale this thing.

The Thredd partnership announced in October 2025 is also relevant context—LoanPro's composable credit infrastructure is being integrated into global payments processors, signaling broader industry adoption of their architecture. This isn't a press release waiting for product-market fit; it's infrastructure expansion.

The Economics Question: Does Card-Based Disbursement Make Sense?

This is where the rubber meets the road for alternative lenders. ACH is cheap and reliable. Mastercard interchange is not. The standard ACH transaction runs $0.25-$1.50 depending on volume and processor. Card-based transactions carry interchange fees that typically run 1.4% to 2.9% plus per-transaction fees, depending on card type and merchant category.

On a $25,000 working capital loan, ACH disbursement might cost you $1.50. Card-based disbursement at 2% interchange would cost $500. That's not a rounding error.

But Mastercard and LoanPro are betting that the economics work for specific use cases:

• Immediate Interest Accrual: With ACH, you might wait 3 business days for funds to settle. That's 3 days of dead time before interest starts accruing. Card-based delivery is instant—interest starts the moment funds hit the wallet.

• Float Preservation: Traditional ACH disbursement means capital leaves your hands immediately. Card-based delivery through JIT (Just-in-Time) funding means funds only move when borrowers actually spend.

• Conversion Improvement: Research shows 64% of consumers want instant loan funding, with more than one in four requiring funds within 30 minutes. Every day of ACH delay creates 'approval fallout'—borrowers who abandon the process before receiving funds.

• Spend Controls: Card-based delivery lets lenders restrict where funds can be used. You can limit spend to specific merchant categories, block certain transaction types, or create closed-loop programs for vertical-specific lending.

The Competitive Landscape: This Isn't New Territory

Marqeta has been powering card-based lending disbursement for years. Their SMB lending solutions offer instant funding via virtual cards, and their credit platform expansion in March 2024 added gateway JIT funding for installment loan conversion. Slope (backed by Marqeta) launched commercial BNPL cards in December 2024, with IKEA already using the platform for business customer financing.

Mastercard Installments itself launched in September 2021, with Barclays, Fifth Third, FIS, Synchrony, and Marqeta as initial partners. The program has been operational in the US, Australia, and UK since early 2022. Loan on Card is essentially Mastercard bringing this infrastructure to LoanPro's lender network.

For alternative business lenders evaluating this space, the relevant question isn't whether card-based disbursement is technically viable—it is. The question is whether Mastercard + LoanPro's specific implementation offers advantages over existing solutions from Marqeta, Cross River, or building direct BIN sponsor relationships.

Embedded Lending Market Context

The embedded lending market is projected to grow from $9.2 billion in 2025 to $35.8 billion by 2035, a 14.6% CAGR. In the US specifically, embedded credit is expected to grow from $7.65 billion in 2024 to $45.74 billion by 2034. API-first lending solutions are forecasted to account for 40% of the market by 2026.

Small business lending specifically is a $7.22 trillion global market expected to grow at 13% CAGR through 2032. Only 44% of SMBs currently have access to external financing, and 37% of those with access report high interest in switching to providers offering embedded lending options. The demand signal is clear.

For context: the ACH Network processed 33.6 billion payments valued at $86.2 trillion in 2024. Same-Day ACH volume grew 45% year-over-year, reaching $3.2 trillion in total value. The payments infrastructure is evolving toward speed, but card rails offer capabilities ACH doesn't—primarily real-time spend visibility and merchant category controls.

Risk Considerations for Alternative Lenders

Card-based disbursement introduces risks that don't exist with ACH:

• Chargeback Exposure: Global chargeback volume is projected to reach 337 million transactions by 2026, a 42% increase from 2023. When borrowers dispute card transactions, the lender faces dispute management overhead that doesn't exist with ACH debits. Mastercard Installments uses unique BINs to identify these transactions, but chargebacks will be handled through standard card dispute processes.

• First-Party Fraud Risk: BNPL and card-based lending see first-party misuse (friendly fraud, refund abuse) as top threats. A 2024 survey found 41% of BNPL users admitted to late payments, up from 34% the prior year. Card-based delivery gives borrowers additional dispute vectors.

• Integration Complexity: Implementing card-based disbursement requires relationships with issuing banks, BIN sponsors, and compliance with card network rules. This is more complex than establishing ACH relationships with your existing processor.

• Delinquency Dynamics: Industry data shows BNPL delinquency rates staying under 2%, lower than the 3.5% overall consumer debt delinquency and 8.8% credit card delinquency. However, these rates may mask stress—76% of BNPL late payments are less than a week overdue, and automatic repayment setups can collect payments regardless of borrower financial stability.

Operational Implications for High-Volume Lenders

For lenders moving $50M+ monthly, the implementation considerations include:

• LOS/LMS Integration: Card-based disbursement requires API integration between your loan origination system and the card issuance platform. LoanPro's architecture is API-first, but you'll need development resources for integration work.

• BIN Sponsor Relationships: You can't just issue Mastercards. You need relationships with issuing banks participating in Mastercard Installments. LoanPro will facilitate these connections, but your compliance and banking relationship teams will need to manage them.

• Spend Control Configuration: The ability to restrict merchant categories and transaction types is powerful but requires thoughtful configuration. Too restrictive and borrowers can't use funds when needed; too loose and you lose the control advantages.

• Reconciliation Complexity: Card transactions create more complex reconciliation requirements than ACH. You're reconciling authorization, settlement, and potential chargebacks across multiple merchant transactions rather than a single ACH credit.

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