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MasterCard Strengthens mCommerce

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In an attempt to ramp up mobile commerce (mCommerce), MasterCard Inc. (MA - Analyst Report) unveiled the Mobile MasterCard PayPass User Interface Software Development Kits (SDKs). This new SDK provides a complete next generation digital range of authorization and submission solutions. 

The SDK assists the new applications offered by the issuers, mobile networks operators and third party software developers on the latest smartphones. Hence, the customers can directly access MasterCard’s PayPass Tap-and-Go contactless payments easily and quickly through their latest smartphones with operating system 7.

Accordingly, Mobile MasterCard PayPass User Interface SDKs’ digital operating system will enable the company to better reach out to its merchants, third-party processors, gateways and point-of-sale manufacturers across the globe. Through this best-in-class tool, MasterCard will be able to boost its operating competence by significantly reducing development times and enhancing its certification efficiencies for its direct connectivity partners.

Moreover, the new technology complements well with mobile payment solution that will function onthe near field communication (NFC), which is equipped with all the latest smartphones. So far, more than 70 models of latest smartphones are found to be attuned with MasterCard’s Mobile PayPass.

Further, the combined market for payment from NFC-equipped mobile phones is expected to reach from the current levels to more than $75 billion globally by 2013, according to Juniper Research. This paves ample scope for MasterCard to develop its mCommercebusiness across the emerging nations that still lay unexplored.

We believe that the ease of access and the less time consuming nature of mobile banking would make this service very popular among mobile subscribers. There lies ample scope of development in this field in the future.

Hence, through the rapidly growing e-commerce and m-commerce technologies, card giants such as MasterCard, Visa Inc. (V - Analyst Report) and American Express Co. (AXP - Analyst Report) are consistently establishing an alternative to the traditional banking model. Meanwhile, American Express was the first payment network in the industry to commence Payment Software Development Kits (SDKs) in December last year.

The new technologies are also aiding the company to channelize its resources in order to adapt to the changing market dynamics and better penetrate the global markets. Overall, these efforts will not only shower sufficient organic growth opportunitie,s but it should also become a part of MasterCard’s long-term growth. Furthermore, this will enhance MasterCard’s operating and competitive leverage in the upcoming quarters.

MasterCard carries a Zacks Rank #3, which implies a near-term Hold rating, while our long-term recommendation remains Neutral.

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