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Mastercard (MA) Expands Partnership to Aid UK Mobile Banking Users

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Mastercard Incorporated (MA - Free Report) recently expanded ties with NatWest Group in a bid to extend the former’s Pay by Bank app (PbBa) across several U.K. mobile banking app users coming under the NatWest Group brands.

Shares of Mastercard gained 0.2% on Aug 24.

Coming back, PbBa appears to be an innovative and hassle-free payment method wherein customers are directed to their respective banking apps to complete the payment procedure. The new app eliminates the need of providing any payment or personal information when payments are being made. Quite interestingly, the app can be utilized through more than one banking app paving the way for increased options to make online payments.

This, in turn, enables users to make quick and secure online payments thereby resulting in enhanced checkout experiences. The app is equipped with advanced security features and technology, thus eliminating the need of setting logins or passwords. Payments made through the app make use of Automated Clearing House (ACH) technology for processing near real-time transactions as a result of which customers’ bank balance gets automatically updated following each transaction.

Mastercard is working closely to incorporate account on file functionality feature into PbBa. This is expected to provide one-touch and deferred payments, and empower customers to make subscription payments. This bodes well since the subscription market holds promising growth prospects.

The recent expansion seems in line with Mastercard’s digital transformation efforts worldwide. PbBa can be availed by all mobile banking users of NatWest within 2022-end, which captures around 50% of all mobile banking users across the U.K. As a result, the partnership reinforces Mastercard’s efforts to tap the significant prospects present in the mobile money industry as it has been significantly contributing toward the global digital boom. Hence, the deal is likely to bolster the company’s capabilities and presence in the U.K.

Zacks Rank & Price Performance

Shares of Mastercard, which carries a Zacks Rank #3 (Hold), have gained 3% in a year against the industry’s decline of 7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Growing Mobile Money Industry

The U.K. seems to be an attractive market for Mastercard, given the digital prospects across the nation. Per a report published in Statista, the country’s mobile money industry has been witnessing substantial growth led by increased technological advancements and higher usage of smartphones. The same source cites that the number of mobile payment users was anticipated to total more than eight million in 2019. Also, 25% of all U.K. smartphone users are anticipated to make mobile money payments at stores within 2023.

Besides the U.K., Mastercard has been undertaking partnerships or significant investments for bolstering mobile money market growth globally. Recently, the company partnered with TNM Mpamba, which has unveiled a Mastercard solution aimed at offering seamless e-commerce transactions for mobile money wallet users of Malawi.

Growing mobile subscriber base is expected to provide an impetus to the worldwide mobile money market, which has persuaded companies to roll out innovative mobile-oriented functionalities and solutions. Per Verified Market Research, the market is estimated to witness growth of 28.7% over the 2021-2028 period.

Similar to Mastercard, other companies such as The Western Union Company (WU - Free Report) , MoneyGram International, Inc. (MGI - Free Report) and Visa Inc. (V - Free Report) have undertaken efforts to tap mobile money market opportunities worldwide.