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Mastercard (MA) to Acquire Dynamic Yield From McDonald's

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Mastercard Incorporated (MA - Free Report) recently announced that it has agreed to acquire Dynamic Yield from McDonald's Corporation (MCD - Free Report) to boost its services momentum. The acquisition of the personalization platform and decision engine company is expected to enable Mastercard to provide clients with ways to serve better customer experiences.

The financial details of the deal, which is expected to close in the first half of next year, are yet to be disclosed. McDonald's bought the Israeli startup in 2019 at more than $300 million to boost customer services and sales, per reports. The Dynamic Yield platform is deployed in numerous McDonald’s drive-thrus and ordering kiosks around the world to improve ordering experiences. Mastercard’s acquisition of the decision-logic technology is likely to further scale its capabilities, extend reach in additional markets and grow third-party businesses. McDonald’s is expected to continue working with Dynamic Yield and Mastercard to keep scaling the technology.

The move will help Mastercard address the growing demand for the technology that offers a more personalized experience for consumers. It will boost the value of Mastercard’s massive network of digital payments and other services, thereby helping its clients and partners in better customer retention. Apart from food and restaurant, Dynamic Yield is already working in the financial, retail, and travel industries. Hence, the acquisition will likely strengthen Mastercard’s presence across industries around the world.

There are companies like Synchrony Financial (SYF - Free Report) that use the services of both Mastercard and Dynamic Yield. Synchrony uses multiple technologies like this to offer customers with tailored consumer experience. With the acquisition deal, additional capabilities of Mastercard will come to life, which will augment consumer engagement. The integration of Dynamic Yield’s abilities with the acquirer’s existing suite of services will likely deliver clients like Synchrony with more operating efficiency and help expand their customer base.

Price Movement

Shares of Mastercard have gained 5.6% over a year against the industry’s 20.3% decline.

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Zacks Rank & Key Pick

Mastercard currently has a Zacks Rank #3 (Hold). A better-ranked player in the business services space is Usio, Inc. (USIO - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Headquartered in San Antonio, TX, Usio provides payment solutions to clients like banks, card issuers, merchants and others. It also has a presence in the crypto ecosystem. Increasing PayFac volumes are boosting USIO’s results. USIO’s 2021 earnings are expected to rise 87% year over year. It has witnessed one upward estimate revision in the past 60 days compared with none in the opposite direction. Usio beat earnings estimates in three the last four quarters and met once, with an average surprise of 81.3%.

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