Embedded Mastercard (MY – Free Report) recently expanded its ties with NatWest Group with the aim of expanding the former’s Pay by Bank (PbBa) application to several UK users of mobile banking applications under the NatWest Group brands.
Mastercard shares gained 0.2% on August 24.
Coming back, PbBa appears to be an innovative and hassle-free payment method in which customers are directed to their respective banking apps to complete the payment process. The new app eliminates the need to provide payment or personal information when payments are made. Interestingly enough, the app can be used through multiple banking apps, paving the way for more options for making payments online.
This, in turn, allows users to make fast and secure online payments, which improves payment experiences. The app is equipped with advanced security features and technologies, eliminating the need to set user IDs or passwords. Payments made through the app use Automated Clearing House (ACH) technology to process transactions in near real time, whereby customers’ bank balances are automatically updated after each transaction.
Mastercard is working closely to integrate the file account functionality into PbBa. This should provide one-touch and deferred payments, and allow customers to make subscription payments. This bodes well as the subscription market holds promising growth prospects.
The recent expansion appears to be in line with Mastercard’s digital transformation efforts around the world. PbBa can be used by all NatWest mobile banking users by 2022, representing around 50% of all mobile banking users across the UK. it has significantly contributed to the global digital boom. Therefore, the deal is expected to strengthen the company’s capabilities and presence in the UK.
Zacks Rank and Price Performance
Shares of Mastercard, which carries a Zacks Rank # 3 (Hold), have gained 3% in one year versus an industry decline of 7%. You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.
Image source: Zacks Investment Research
Growing mobile money industry
The UK appears to be an attractive market for Mastercard, given the digital outlook across the country. According to a report published in Statista, the country’s mobile money industry has experienced substantial growth thanks to increased technological advancements and increased use of smartphones. The same source cites that the number of mobile payment users is expected to exceed eight million in 2019. In addition, 25% of all UK smartphone users are expected to make mobile money payments in stores by 2023.
In addition to the UK, Mastercard has made significant partnerships or investments to bolster the growth of the mobile money market globally. Recently, the company partnered with TNM Mpamba, which unveiled a Mastercard solution to deliver seamless e-commerce transactions to mobile money wallet users in Malawi.
The growth of the mobile subscriber base is expected to give a boost to the global mobile money market, which has persuaded companies to deploy innovative mobile-oriented features and solutions. According to verified market research, the market is expected to grow by 28.7% over the period 2021-2028.
Like Mastercard, other companies such as Western Union company (WU – Free report), MoneyGram International, Inc. (MGI – Free report) and Visa inc. (V – Free Report) have undertaken efforts to exploit the opportunities in the mobile money market around the world.