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Mastercard Expands Tie-Up to Fortify Presence in Asia Pacific

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Mastercard Incorporated (MA - Free Report) recently expanded its collaboration with EedenBull — a fintech firm based in Norway, Scotland and Singapore. Prior to this deal, both the companies also expanded their alliance in Europe this month.

Through this extended tie up in Asia Pacific, Mastercard will back EedenBull in rolling out a commercial cards platform. The new digital platform is intended to offer enhanced commercial payments services in Asia Pacific for banks and their business clients. Apart from the new platform, they will also get access to EedenBull’s spend management platform—Q Business. Notably, Q Business, which is provided by a network of banks in the Nordics, offers a seamless digital solution for easing the time-consuming processing of cash and checks.

Furthermore, we believe the latest move by Mastercard highlights the company’s constant efforts to strengthen presence in the Asia Pacific region. It has been investing heavily to embrace newer technologies and partnering with several organizations to capitalize on prospects present in the business-to-business (B2B) payments market of Asia Pacific. This month itself, Mastercard unveiled Soft POS in India by teaming up with Axis Bank and Worldline. Notably, Southeast Asia’s super app — Grab — launched a digital prepaid card in June backed by Mastercard in the Philippines.

Apart from penetrating further into the Asia Pacific region, these initiatives definitely hint toward growing demand for cashless payments in Asia Pacific amid the COVID-19 pandemic, where homebound people find digital transactions convenient. Per a study by MasterCard, this trend is here to stay even in the post COVID-19 world. According to the same study, almost half of the respondents in the Asia-Pacific region confirmed that they are adopting cashless transactions more often.

Notably, digital transactions have been gaining momentum globally for quite some time, with the pandemic accelerating the trend further. We believe that the growing popularity of contactless payments and the rising adoption of digital transactions worldwide are likely to position Mastercard well for long-term growth.

Furthermore, the company is experiencing a revival in business volumes, driven by normalization in most markets courtesy of gradual reopening of businesses. The company’s switched volume and switched transactions have been displaying an improving trend, partly backed by the easing of social-distancing measures in several markets and the positive impact drawn from the fiscal stimulus offered in the United States. We note that switched transactions, which were down 7% for the week ending on May 28, reported a rise of 1% in the week ending Jun 21.

Zacks Rank & Share Price Performance

Shares of the company have gained 8.5% in a year compared with the industry’s growth of 2.9%. Other companies in the same space, namely, Global Payments Inc. (GPN - Free Report) , The Western Union Company (WU - Free Report) and Visa Inc. (V - Free Report) have rallied 0.2%, 5.7% and 8.9%, respectively, in a year’s time.

The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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