The new platform makes BNPL available for its consumers and merchants worldwide.
It enables banks, lenders, fintechs, and wallets to offer a 'zero per cent interest', pay-in-four model.
Mastercard Instalments can be digitally accessed pre-approved via consumers' banking payments apps, or through instant approval during checkout.
Fees for the app will be bank-specific and not dictated by Mastercard.
Mastercard Chief Product Officer, Craig Vosburg, said customers want more flexibility when managing their payments.
"Mastercard Instalments has been built on our guiding principles to protect consumers and enable choice without sacrificing trust and security," Mr Vosburg said.
"It is a digital-focused way to pay today and tomorrow, delivered through consumer’s most trusted relationships with their banks and other lenders, at merchants of their choice."
The new platform will expand on Mastercard's open banking technology, and could become near ubiquitous as Mastercard is accepted by most merchants around the world.
In addition to Australia Mastercard Instalments will be available in the United States and the UK, with plans to scale other markets in the future.
Already, Mastercard's instalments option works with Barclays US, Fifth Third, FIS, Galileo, Huntington, Marqeta, SoFi, and Synchrony in the United States, and will partner with Qantas Loyalty and Latitude in Australia.
This news from Mastercard comes just couple months after PayPal launched its own 'Pay in Four' option, adding yet another big player to the already crowded buy now pay later or instalments market.
There are now nearly 30 BNPL platforms in Australia, with 12 publicly listed on the ASX.
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