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Mastercard Expands Alliance With PayPal, Boosts Global Presence


Mastercard Inc. MA has inked a deal with PayPal Holdings, Inc. PYPL to re-expand their existing partnership into Canada, Europe, Latin America and the Caribbean and the Middle East and Africa.

Following the recent expansion of their partnership into the United States and Asia Pacific, the addition of these new markets will provide both the companies an opportunity to serve customers jointly and globally.

Mastercard possesses a strong value proposition under its brand name. It has always been engaged in forming strategic alliances in order to expand its geographical presence and improve offerings.

Year to date, its shares have gained 39%, outperforming the industry’s rally of 29%. The expanded partnership with PayPal is expected to further strengthen its commitment to the cardholders across the globe to provide simple, faster and secure payment experience.

Per the agreement, people using Paypal wallet will be able to pay through Mastercard easily while transacting. Moreover, consumers can conveniently choose Mastercard as their default payment method to perform easier checking-outs. Consumers can also now easily link Mastercard cards with PayPal from banking app through collaborations with Mastercard bank partners.

The deal requires Mastercard and PayPal to work together to capitalize on new Mastercard payment flow technologies to enhance value for Mastercard users, financial institutions and customers of PayPal. Though this alliance, consumers are now able to quickly encash funds held in their PayPal accounts with the help of a Mastercard debit card.

With the help of Mastercard’s tokenization service, PayPal can now easily expand its presence at the point of sale. Consumers can use the tokenized Mastercard in their PayPal Wallet for making in-store purchases at more than 6.5 million contactless-enabled locations throughout the world.

It has also created immense convenience for merchants who are processing payments via Braintree, a division of PayPal based in Chicago that specializes in mobile and web payment systems for ecommerce companies. These merchants in Europe, Latin America and the Caribbean and the Middle East and Africa in addition to the United States and Asia Pacific, can use Masterpass as a payment option. The merchants will have more choices as they will be easily able to link Masterpass into their checkout procedure to offer a more convenient user experience for the consumers.

Through this partnership, both the companies look forward to bolster digital payment adoption across the world through improved online payment. This will enable millions of consumers to manage and move their money with convenience.

Zacks Rank & Other Stocks to Consider

Mastercard presently carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the Financial Transaction Services space can also consider stocks like Visa, Inc. V and Total System Services, Inc. TSS. Both the stocks carry a Zacks Rank #2.

Visa delivered positive earnings surprises in each of the last four quarters with an average beat of 8.4%.

Total System delivered positive earnings surprises in all of the last four quarters with an average beat of 3.5%.

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