Mastercard AI Agent Pay Promotes Circular Fashion Growth
The fashion industry's environmental challenges are hard to overlook, characterised by extensive use of water, energy and chemicals, along with labor rights issues.
Amid these concerns, poor demand forecasts exacerbate the issue, leading to up to 40% of produced textiles ending up incinerated or in landfills, according to the World Economic Forum.
Mastercard has observed an increasing inclination toward second-hand clothing purchases, driven by cost-efficiency and environmental awareness.
Ellen Jackowski, Chief Sustainability Officer and EVP at Mastercard, notes: “Whenever I compliment someone on their clothing lately, it feels like half the time their response is, ‘Thanks! It’s a rental.’”
She also highlights the company's research findings: “Mastercard’s Economics Institute recently dug into this trend to analyse spending across online merchants who resell or rent clothing and accessories.
The finding? Consumers’ spending at both luxury and mass circular fashion merchants has increased over the last few years, reaching new high shares of online US apparel spending in 2025—even exceeding post-pandemic highs. Today, about 27% of online apparel spent in the luxury market was at circular fashion merchants.”
The Rise of Circular Fashion in Fintech
Circular fashion, which involves second-hand and upcycled clothing, is gaining momentum. Mastercard's data reveals that by 2024, approximately 27% of online luxury apparel sales occurred through circular fashion outlets. Mass circular retailers, meanwhile, have maintained a steady market presence, increasing to 5.4% in 2024.
This trend has persisted since the pandemic, with urban consumers especially favoring circular fashion. Despite being second hand, circular fashion adheres to seasonal trends, with mass market peaks in March contrasting with the overall apparel peak in November.
Retailers leverage this trend by offering winter discounts and Black Friday promotions to attract shoppers to circular fashion avenues.
Michelle Meyer, Chief Economic at Mastercard, remarks, “Circular fashion is on the rise - we can see in our unique data. In this environment of trade tensions and potentially disrupted supply chains, the circular economy has the potential to gain momentum.”
Advantages of Embracing Circular Fashion
The shift toward circular fashion offers benefits to both brands and consumers. It extends the lifecycle of fashion items, mitigating landfill contribution, and supports enhanced sustainability within the industry.
By reselling clothing, consumers recoup some of the original value and access higher quality at lower prices. For brands, maintaining items in circulation longer bolsters visibility among younger shoppers and influencers.
Ellen Jackowski adds, “This shift not only extends the lifecycle of goods and reduces landfill waste but also provides economic benefits. As economic uncertainty looms, shoppers can find great deals, and sellers find new homes for items. Businesses can tap into this trend, doing well while doing good for the planet.”
Mastercard's Fintech Role in the Circular Economy
Mastercard's involvement in circular fashion extends to digital innovations such as cryptocurrency, which is becoming frequent in the fashion sector to facilitate seamless global transitions and accommodate digital checkout demands.
Mastercard introduced its Agent Pay in 2025, demonstrating AI's potential to transform purchase behavior.
The AI agent functions as a virtual assistant, aiding in searching, recommending, and making purchases on behalf of the consumer, streamlining the shopping experience.
Jorn Lambert, Chief Product Officer at Mastercard, states: “Mastercard is transforming the way the world pays for the better by anticipating consumer needs on the horizon. The launch of Mastercard Agent Pay marks our initial steps in redefining commerce in the AI era.”
