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Mastercard (MA) Expands Ties to Tap Growth in Embedded Finance

Mastercard Incorporated MA strengthened its collaboration with the Open Finance sector player, Fabrick. The tie-up aims to create Embedded Finance solutions, which will infuse greater digitization within businesses, financial institutions and fintechs throughout Europe.

The Open Finance platform of Fabrick, which connects more than 400 counterparties, will lend a helping hand to Mastercard in developing embedded payment solutions.

Both companies have shared a strong bond since 2019 and have jointly developed innovative digital financial services for aiding the commercial ecosystem. Mastercard has also pursued a minority investment in Fabrick.

With the partnership expansion, Mastercard and Fabrick will utilize their collective expertise and resources to harness opportunities in the Open and Embedded Finance space.

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Embedded Finance solutions provide an opportunity for companies, irrespective of their sector, to utilize APIs or platforms and subsequently, combine financial services directly within their product offerings. This, in turn, relieves businesses from the hassles of constructing a proprietary financial infrastructure but still empowers them to extend provide payment, banking and insurance services resulting in strong customer relationships.

The latest move can be termed as a time opportune one considering the growth prospects in the worldwide embedded finance market. The space is expected to witness a CAGR of 32.2% over the 2023-2030 period, per a report by Grand View Research. Additionally, the growing digitization spurred by higher Internet penetration and increased usage of smartphones is anticipated to give a further drive to the growth of the embedded finance industry.

Mastercard picks partners with a common motive of offering innovative digital payment solutions and strives to create a seamless experience for worldwide customers. A solid digital arm built on partnerships with well-established organizations and significant investments makes Mastercard the choice of financial service providers in various countries. Its digital prowess has also led the tech giant to capture a sizeable share of the global digital payments market.

Shares of Mastercard have gained 4.9% year to date compared with the industry’s 2.6% rally. MA currently carries a Zacks Rank #3 (Hold).

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Stocks to Consider

Some better-ranked stocks in the Business Services space are Inspired Entertainment, Inc. INSE, PagSeguro Digital Ltd. PAGS and RCM Technologies, Inc. RCMT. Inspired Entertainment currently sports a Zacks Rank #1 (Strong Buy), and PagSeguro Digital and RCM Technologies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The bottom line of Inspired Entertainment outpaced estimates in three of the last four quarters and missed the mark once, the average surprise being 27.99%. The Zacks Consensus Estimate for INSE’s 2023 earnings indicates a surge of 42.9% from the year-ago reported figure. The same for revenues suggests growth of 20.4% from the prior-year tally. The consensus mark for INSE’s 2023 earnings has moved 14.6% north in the past 30 days.

PagSeguro Digital’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 36.71%. The Zacks Consensus Estimate for PAGS’s 2023 earnings suggests an improvement of 4.4% from the year-ago reported figure. The consensus mark for PAGS’s 2023 earnings has moved 1.1% north in the past 60 days.

The bottom line of RCM Technologies outpaced estimates in three of the last four quarters and missed the mark once, the average surprise being 8.44%. The Zacks Consensus Estimate for RCMT’s 2023 earnings suggests an improvement of 3.5% from the year-ago reported figure. The consensus mark for RCMT’s 2023 earnings has moved 9.6% north in the past 30 days.

Shares of Inspired Entertainment, PagSeguro Digital and RCM Technologies have gained 8.5%, 15.4% and 33.5%, respectively, year to date.

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Mastercard Incorporated (MA) : Free Stock Analysis Report

RCM Technologies, Inc. (RCMT) : Free Stock Analysis Report

Inspired Entertainment, Inc. (INSE) : Free Stock Analysis Report

PagSeguro Digital Ltd. (PAGS) : Free Stock Analysis Report

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