First Data Corporation (FDC - Free Report) announced a new partnership with an India-based private sector bank, RBL Bank. The multi-year agreement entitles RBL Bank to leverage First Data’s VisionPLUS for its credit card customers across India.
The deal will help First Data to increase its penetration in the Indian market by addressing the dynamic needs of customers. Moreover, the clientele of the company is also likely to increase, thanks to the latest move.
VisionPLUS is an end-to-end card processing services software which provides comprehensive payment product solutions for consumer credit, debit, loans, prepaid products and commercial cards.
RBL Bank is a commercial bank that provides services like corporate & institutional banking, commercial banking, retail Banking, agriculture & development banking and financial markets operations. The deal will help the bank to offer new and innovative features to customers.
Market in India Holds Promise
First Data’s continuous investment to expand the product portfolio is bringing in new clients from the Indian market. Moreover, the company is benefiting from the growing need for digital payment solutions in India. The company is well positioned to cater to the need for efficient digital payment system in India by offering card processing services and payment solutions through mobile and other digital modes.
In line with the partnership with SBI Card, the company also announced the set-up of a new data center facility in the country to provide card management solution.
Reportedly, a major portion of all e-commerce payments in the country is done through the company’s payment gateway.
Per a Research and Markets report, market for digital payment system in India is expected to grow at a CAGR of 58.9% between 2017 and 2023.
Partnerships — Key Catalyst
Over the past few years, strategic partnerships have played an important role in shaping First Data’s growth trajectory. Earlier partnerships with Ford Motor Company and Walmart are still contributing to the company’s growth. We believe that acquisition and partnership deals will sustain the momentum for First Data over the long run.
In late January 2018, First Data announced a similar kind of partnership with SBI Card, a leading credit card issuer in India, which allows SBI Card to leverage VisionPLUS to enhance service offerings.
Last quarter, the company also teamed up with AccorHotels Group which is benefiting its global and cross channel payments.
The company also renewed PNC Merchant Services joint venture which will continue to benefit the company in maintaining a strong relationship with bank partners.
Zacks Rank & Stocks to Consider
Currently, First Data carries a Zacks Rank #3 (Hold).
Investors interested in the broader business service sector can consider WageWorks (WAGE - Free Report) , Global Finance Corporation (GFN - Free Report) and Fiserv (FISV - Free Report) . While WageWorks and Global Finance sport a Zacks Rank #1 (Strong Buy), Fiserv carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for WageWorks, Global Finance and Fiserv is currently pegged at 15%, 11% and 11.5%, respectively.
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