Mastercard Poised to Benefit From Shift to Digital Payments
The shift in the payment space to e-commerce has an impact in favor of Mastercard Inc. due to its resilience and differentiated business model. These include a global payments network, technologically advanced products and services, security and a strong brand name that is recognized by consumers.
The COVID crisis accelerated the use of electronic payment methods due to the increasing acceptance of digital and contactless solutions. Changing consumer trends include the preference for contactless transfers, the rapid adoption of e-commerce and an increasing aversion to cash, the merchant's requirement for the acceptance of omni-channel services, and the need to automate B2B payments. In particular, each of these features gives Mastercard the opportunity to capitalize on them.
Mastercard is advancing its click-to-pay service, which is a smarter and safer way to make online payments. The company differentiates its Click-to-Pay offer with an additional level of security made possible by new data, AI and machine learning technologies.
In addition to looking after consumers, the company supports retailers from small and medium-sized companies that are most affected by their digitally activated solutions. With that in mind, she launched her Digital Doors initiative, which provides merchants with a gateway, cybersecurity, and other resources to quickly build an online presence and accept electronic payments.
The company also offers a full suite of installment payment features popularly known as the "buy now, pay later" feature through API-based solutions, partnerships and acquisitions (Application Programming Interface). This service offers a wider range of credit solutions for merchants and consumers, both online and in-store, which is especially important in a post-COVID environment with credit issues.
The Mastercard installment payment solution has been available on a market-specific basis for several years. The acquisition of Vyze enabled the company to expand its presence at festival retailers in the US and internationally. It forged close relationships with Pine Labs and Afterpay to provide bespoke regional solutions.
Additionally, Mastercard recently announced a new alliance with Splitit to provide interest-free rates for e-commerce purchases.
While the pandemic accelerated consumer adoption of digital payment solutions, the crisis fueled demand for the company's offerings, including cybersecurity and data analytics capabilities. These services enabled him to deliver distinctive solutions that are valued by a wide variety of customer segments and helped the company diversify its sales.
As the transition to a digital economy accelerates, the demand for open banking services is increasing. In Europe, the company's open banking activities, which were unveiled last year and will continue to grow in importance. The company added some good fintech players like Modulr, DiPocket and Aion alongside the recently announced Tesco win. The acquisition of Finicity will further advance the open banking strategy in North America.
The company's digital and multi-rail solutions help capitalize on key opportunities by providing customers with the wide choice and skills needed to handle a wide range of payment flows in this rapidly changing industry . The domain also hosts other providers such as American Express Co. AXP, Visa Inc. V, and Discover Financial Services DFS et al.
The Mastercard currently has a Zack # 3 (Hold). Over the past six months, the stock is up 27%, compared to an industry growth of 18.2%.
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