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Mastercard (MA) & Alipay Unite to Enhance Payment Experience
Mastercard Incorporated MA collaborated with Alipay, a leading digital payment platform in China, to make overseas payments easier in the country for international travelers. MA cardholders will be able to go cashless and transact via Alipay app by linking their debit or credit card with the wallet.
This move is likely to bode well for Mastercard, which is focused on solidifying its payment network and diversifying it to new locations. This partnership will boost MA’s payment network revenues which contributed 63.5% to its total revenues in first-quarter 2023. The company will earn through higher fees generated as a result of improved gross dollar volume. This strategic collaboration is expected to grow business organically.
Mastercard will be able to enhance its value proposition by expanding to new markets and thus experience robust retention of clients (financial institutions). Account holders can take advantage of a seamless payment experience while Chinese merchants get access to a larger customer base. Alipay and Mastercard’s collaboration is expected to strengthen MA’s footprint in Chinese market. Moreover, travel rewards for cards issued in South Korea, Hong Kong, Macao and Taiwan regions should help with customer loyalty for financial institutions.
This partnership highlights MA’s goal to tap opportunities such as rebounding travel around the world after pandemic. Per Mastercard Economics Institute's Travel Industry Trends 2023 report, bookings for leisure travel rose 31% in March compared with the same period of 2019 levels. Popular tourist destinations around the world can be attractive markets for its expansion motives.
MA carries out innovation in technology to keep cardholders’ data secure and free from cyber-attacks. The company also believes in creating innovative solutions to reduce its carbon footprint. Per reports, it has partnered with HSBC Holdings plc HSBC to recycle debit and credit cards, in a bid to reach net-zero emissions by 2040.
It plans to reduce overfilling of landfills with billions of cards. A shredding machine will be used for cards and thereafter it will be transferred for recycling to a facility.
Shares of Mastercard have gained 9.7% in the past six months compared with the industry’s growth of 9%.
Zacks Rank & Key Picks
Mastercard currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Financial Transaction Services space are Usio, Inc. USIO and Paysafe Limited PSFE, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Usio’s 2023 earnings indicates an increase of 140.7% from the prior-year reported number. The consensus mark for 2023 revenues indicates 19.1% growth.
The consensus estimate for earnings witnessed one upward estimate revision over the past 60 days against none in the opposite direction.
The Zacks Consensus Estimate for Paysafe’s 2023 earnings is pegged at $2.2 per share, which witnessed two upward estimate revisions over the past 60 days against none in the opposite direction.
PSFE’s earnings beat estimates in three of the last four quarters and missed once, the average surprise being 190.5%.