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Mastercard (MA) Ties Up to Boost Cybersecurity Suite in MEASA

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To collaborate with the Dubai Financial Services Authority (DFSA), Mastercard Incorporated (MA - Free Report) recently partnered the Threat Intelligence Platform (TIP) of DFSA.

Notably, DFSA is the independent regulator of financial services delivered in or from the Dubai International Financial Centre (DIFC), one of the leading financial centres of the Middle East, Africa and South Asia (MEASA). 

Shares of Mastercard gained 0.9% on Dec 23.

The recent alliance seems aptly timed on the part of Mastercard as the technology player in the global payments space aims to strengthen its ties with DIFC. A few months back, MA joined forces with DIFC to introduce the Global Cyber Forward program, aiming to build a reliable digital environment across Dubai.

Mastercard’s latest alliance with DFSA and DIFC will enhance cybersecurity capabilities. These advancements have the power to identify time-sensitive threat signatures and data patterns, which indicate attempts or actual incidence of unauthorized access to information or physical assets.

The combined efforts will contribute to the formation of a ‘threat library’ through which DIFC and more than 2,500 financial institutions that it supports can swiftly detect and counter real-time risks.

Initiatives similar to the latest one reinforce the trust that financial institutions have on Mastercard’s cutting-edge and AI-enabled cybersecurity capabilities. MA’s advanced cyber systems have shielded its stakeholders from frauds (valued at $3 billion) over the past two years.

The recent move is also likely to bolster presence of Mastercard across the MEASA region. MA continues to rampantly pursue initiatives to bring about a secure digital infrastructure equipped to check the growing number of cybercrimes worldwide.

With Cybersecurity Ventures anticipating global cybercrime costs to reach $1.75 trillion, cumulatively over the 2021-2025 period, it is evident that a company like Mastercard, offering a comprehensive portfolio of fraud detection solutions for varied industries, remains well-poised to capitalize on the prevalent scenario.

The latest initiative to boost cybersecurity efforts in the financial industry and payments ecosystem is noteworthy since the space remains vulnerable to advanced forms of frauds. Very recently, MA collaborated with Alphabet to launch the tokenization process for Google Pay users with an MA card paving the way for secure digital payments across India.

The alarming need to control the rising number of cybercrimes gained prominence amid the COVID-19 outbreak, which compelled people to embrace digitization and made it the new normal. Inclination toward contactless payments prompted fraudsters conceiving sophisticated methods of cybercrimes.

Per 2021 Mastercard Recovery Insights, 20-30% of the pandemic-induced shift to digital commerce across the globe is projected to be permanent. Therefore, there is an increasing need to promote security in the rapidly growing digital economy for curbing illegal intrusion into the personal space of valuable individual information.

Mastercard is making consistent efforts to boost its cybersecurity capabilities, for which it continuously enters into partnerships or makes substantial investments.  In June 2021, MA acquired Ekata to extend its identity verification efforts and assure safe and secure digital transactions for merchants and customers.

Similar to Mastercard, other companies like Visa Inc. (V - Free Report) , PayPal Holdings, Inc. (PYPL - Free Report) and American Express Company (AXP - Free Report) are continuously rolling out a diverse range of fraud detection solutions to protect merchants and consumers amid a growing digital economy.

Visa introduced the Advanced Identity Score in 2020 to minimize digital identity frauds and reduce operational costs linked with identity-related forgeries. V steadily invests in technology to minimize the impact of fraud, and safeguard consumer and merchant-oriented information. The Visa solution CyberSource boasts a diversified portfolio of payment and fraud management tools.

PayPal made substantial investments to utilize blockchain technology for boosting digital identity capabilities. PYPL’s risk management and tokenization ensure legitimacy of transactions and prevent illegal or fraudulent transactions. In May 2021, PYPL partnered Arkose Labs to combat security threats and fraud across the Honey shopping and rewards platform of the former.

American Express strives hard to enhance its digital solutions suite for assisting its merchants and Card members across the globe. In June 2021, AXP collaborated with online fraud-prevention companies, namely Accertify, Microsoft and Riskified. In July 2020, AXP launched its proprietary automated accounts payable (AP) solution, American Express One AP, considering robust demand for AP solutions that secure payment processes via digitization.

Shares of Mastercard have gained 7.3% in a year against the industry’s decline of 17.7%. MA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment ResearchImage Source: Zacks Investment Research

While shares of Visa and American Express have gained 3.8% and 39.9%, respectively, in a year, the PayPal stock has lost 19.6% in the same time frame.

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