Mastercard Incorporated (MA - Free Report) has rolled out a consumer protection program, which intends to protect fuel merchants against fraudulent transactions and minimize the amount of risk suffered. While many fuel companies have upgraded to secured EMV terminals, some of them have not yet done so. The new program is likely to assist fuel merchants who have not yet completed the upgrade process.
Notably, EMV lays down a set of security standards, which attempts to reduce card-related fraudulent cases. Apart from initiating new program, Mastercard also announced about postponing the deadline of shifting to EMV Automatic Fuel Dispenser (AFD) from this October till Apr 16 of next year. Earlier, it had also shifted the deadline of switching over to secure EMV transactions for three years from October 2017.
The new program has been announced by Mastercard, taking into consideration the financial turmoil induced by the COVID-19 breakout. During such a period, it may become difficult for companies to complete the upgrade process due to the operating challenges prevalent in the global markets.
Shares of this Zacks Rank #4 (Sell) company have gained 13.8% in a year compared with the industry’s growth of 9.8%. We believe the company’s strong fundamentals are likely to sustain momentum in the long haul. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other companies in the same space, namely, Global Payments Inc. (GPN - Free Report) and Visa Inc. (V - Free Report) have rallied 19.5% and 15.5%, respectively, in a year’s time, while The Western Union Company (WU - Free Report) has declined 3.4% in the same time frame.
Other Initiatives Taken up by Mastercard
The company’s issuing banks will have access to enhanced data for early detection of high-risk fraud transactions at fuel pumps. The Safety Net and Fraud Rules Manager programs of Mastercard will be uplifted as well. For assessing safety of the purchase environment, it will also provide the company’s Merchant Fraud Insights to fuel merchants plagued with high fraud cases.
Moreover, adoption of EMV terminals is of primary importance across the United States, which is suffering from high card present fraud losses at AFDs for quite some time now. Nevertheless, for merchants upgraded to EMV transactions, it has been observed that counterfeit fraud basis points have declined by 88% in the United States during the time frame between fourth quarter of 2015 and 2019.
Furthermore, we believe that the company’s efforts to boost payments solutions are likely to drive top line in the days ahead. In first-quarter 2020, Mastercard’s revenues of $4 billion improved 5% year over year. This upside was driven by an increase in gross dollar volume, switched transactions and other revenues. Despite the COVID-19-induced business disruption that adversely impacted the company’s cross-border revenues, overall earnings gained from expansion in gross dollar volumes.
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