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Mastercard (MA), Mashreq Unveil Tap on Phone for Aiding SMEs

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Mastercard Incorporated (MA - Free Report) recently teamed up with UAE-based Mashreq Bank to introduce Tap on Phone, which is a cost-effective and hassle-free digital payment technology intended to cater to Small and Medium Businesses (SMEs). Following the launch, Mashreq Bank becomes the first bank in the Middle East and North Africa (MENA) region to utilize Tap on Phone.

Shares of Mastercard have lost 0.1% in the last two days’ trading.

It is worth mentioning that Tap on Phone is a digital solution that has been launched with the assistance of Mastercard’s Payment Gateway Technology. Further, the solution is equipped with the ability to seamlessly convert Android smartphones into reliable payment acceptance devices. Notably, the same is capable of accepting contactless cards, mobile wallets and even smartwatches without any added equipment or setup-related expenses. Case in point, businesses just need to download the mobile app, following which they can provide customers with secure and hassle-free contactless checkout experience.

Moreover, the above-mentioned move of Mastercard is dedicated to help SMEs particularly in the food and beverage industry and services comprising food delivery and farmers markets.

Furthermore, the Tap on Phone launch bodes well for the local micro and small merchants of UAE who are currently not accepting digital payment methods despite the convienience and advantage of the same. This is because traditional point-of-sale (POS) systems utilized by large retailers requires not only involve high costs but are also time consuming with regard to installation and usage. Notably, the new solution is likely to bring the much-needed security, convenience and value for SMEs, which in turn, is expected to drive their business sales.

Notably, the Tap on Phone Solution can be availed in 16 markets across Europe, Asia Pacific, Latin America, North America and Middle East & Africa, which is a testament to its worldwide presence.

Shares of Mastercard have gained 18% in a year compared with the industry’s growth of 10.8%.

The company’s peers, namely, Visa Inc. (V - Free Report) and American Express Company (AXP - Free Report) have rallied 16.1% and 2.8%, respectively, in a year’s time, while that of Discover Financial Services (DFS - Free Report) have lost 3.4% in the same time period.

Mastercard has been making every effort to help SMEs globally, which have been grappling with the pandemic-induced financial uncertainties. The company has made several investments to roll out cost-effective solutions for assisting small businesses to adopt digital means.

Case in point, Tap on Phone is part of the SME in a Box service launched this year by Mastercard across the Middle East & Africa region. The SME in a Box, which offers an aggregate of diverse financial services through a single app, aims to pave the way for evolution of SMEs into digital platforms.

Additionally, the latest move clearly highlights Mastercard’s commitment to cater to growing demand for cashless payments worldwide amid the coronavirus outbreak, which has compelled people globally to prefer contactless payments as it minimizes contact. Notably, UAE is no exception to the trend.

The fact can be further substantiated by a Mastercard research to gauge UAE consumer sentiment with regard to contactless payments, per which 82% of the country’s shoppers prefer contactless methods of payment. The same research also unveiled that 81% of the participants believe that they will continue to make digital payments in the days ahead. This highlights the fact that the trend of digital payments is likely to stay even beyond the pandemic, which positions Mastercard well for long-term growth. Notably, the company has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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