Back to top

Image: Bigstock

Mastercard's (MA) Digital Solution to Aid SMEs in Zambia

Read MoreHide Full Article

Mastercard Incorporated (MA - Free Report) recently collaborated with Zambia’s fintech company, Digital PayGo, in a bid to introduce a merchant mobile payments solution called “SME-in-a-Box”.

The innovative solution, developed with the payment technology of Mastercard, enables Small and Medium Enterprises (SMEs) to utilize online channels while conducting or receiving digital payments. With a hassle-free, convenient and secure method of undertaking electronic transactions through one’s mobile device, SME-in-a-Box facilitates seamless digital transactions between merchants and their customers.

The recent tie-up aims to digitally transform SMEs by upgrading payment acceptance options, which seem to be the need of the hour given the ongoing inclination of customers toward digital payments. The solution intends to address several headwinds that SMEs grapple with from time to time including unexpected financial needs and adequate availability of capital. This, in turn, is anticipated to bolster growth prospects of SMEs.

Besides, rolling out solutions similar to the latest one highlights Mastercard’s sincere efforts to facilitate increased usage of mobile wallets in an effort to enhance digital payments. The recent alliance reinforces Mastercard’s capabilities and presence across Zambia as well.

Mobile wallets emerged as one of the most popular contactless payment methods amid the COVID-19 pandemic. This has provided Mastercard the perfect opportunity to capitalize on. Increasing internet penetration and higher smartphone usage have been driving mobile money transaction value. This June, Mastercard partnered with Zambia’s telecommunication company, Zamtel, in a bid to facilitate contactless payments globally for the latter’s Mobile Money customers. According to a Fidelity National Information Services (FIS - Free Report) report, digital wallets are likely to account for over 50% of worldwide e-commerce payments by 2024.

Per a report of the Zambian Ministry of Commerce, Trade and Industry commissioned last year, SMEs account for 97% of all businesses across Zambia and offer employment to more than 50% of the working-class group. Further, the small businesses often grapple with shortage of resources and ineffective infrastructure, which hinders them from providing seamless cashless payment interfaces. Thus, Mastercard’s move to aid SMEs seems to be a prudent one as they form an integral part of Zambia’s economy.

Mastercard keeps on partnering with fintechs across the globe and launches cutting-edge digital payment tools to bring more small businesses under the ambit of a growing digital economy. This, in turn, has helped Mastercard in enhancing its digital services portfolio, penetrating further into the underserved areas and bolstering global presence. The company has been offering necessary assistance to SMEs ranging from technological support to aiding them in rolling out new products and enhanced payments solutions. By 2025, it aims to include 50 million micro and small businesses within the digital economy. Mastercard continues to utilize its technology and collaborations for revolutionizing the payments landscape and promoting rapid adoption of digital means.

Zacks Rank & Price Performance

Shares of Mastercard, which carries a Zacks Rank #2 (Buy), have lost 0.2% in a year compared with the industry’s decline of 11.7%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Other Stocks to Consider

Some other top-ranked stocks in the financial transaction services space include Visa Inc. (V - Free Report) and Global Payments Inc. (GPN - Free Report) , both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Visa and Global Payments have a trailing four-quarter earnings surprise of 9.03% and 4.02%, on average, respectively.