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Mastercard (MA) Eyes Southeast Asia, LatAm Expansion for Growth

Mastercard Incorporated MA foresees tremendous growth opportunities from its Southeast Asia and Latin America (LatAm) operations, per Reuters. The co-president of International Markets, Ling Hai, highlighted MA’s prospects in these emerging regions at the Reuters Global Markets Forum.

Mastercard’s withdrawal from Russia left a void in its revenue generation. The Russia-Ukraine conflict affected this leading global payment solutions facilitator as it generated about 4% and 2% of its total revenues from these zones, respectively. Also, the ban from the Indian government in 2021 on issuing new cards due to non-compliance with some local rules barred MA from expanding its presence in a growing economy. MA is working with the Indian administration and the Reserve Bank of India to find a solution fast. MA still views India as a key growth area, where it has invested $2 billion since 2014.

In the meantime, Mastercard’s focus on the Southeast Asia and Latin America markets is expected to intensify. Some of its recent deals underpin this intent. MA joined forces with Asia’s well-established financial services group DBS Bank and merchant commerce platform Pine Labs to unveil the “Mastercard Installments with Pine Labs” program.

This March, Mastercard joined forces with Mexico’s buy now, pay later (BNPL) platform Aplazo to introduce an innovative virtual card solution coupled with BNPL facility across Latin America for the first time.

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The supply chains moving away from China created great opportunities for the Southeast Asian countries. The advantages of demographics and rapid digitization are playing major roles in accelerating growth in these regions. With its expanding footprint, Mastercard can witness ballooning revenues from this area. This is also in line with MA’s aim to bring one billion people under the ambit of the digital economy by 2025.

Mastercard is complementing its geographical diversification efforts with product variation. It is bringing different types of payment options to the markets and encouraging innovation. MA’s focus on high growth areas like retail, telecom, business-to-business payments, etc. is expected to augur well for the long term.

Price Movements

Shares of Mastercard have gained 8.3% in the past six months against the industry’s 8.7% decline.

Zacks Investment Research
Zacks Investment Research


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Zacks Rank & Key Picks

Mastercard currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the Business Servicesspace are Barrett Business Services, Inc. BBSI, MarketWise, Inc. MKTW and Automatic Data Processing, Inc. ADP. While BBSI sports a Zacks Rank #1 (Strong Buy), MKTW and ADP presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Barrett Business Services’ bottom line for 2022 is expected to jump 21.4% from the year-ago reading. The stock has witnessed two upward estimate revisions in the past 30 days against none in the opposite direction. BBSI's earnings beat estimates in three of the last four quarters and met the mark once, the average surprise being 51.6%.

MarketWise’s bottom line for the current quarter is likely to surge 100.5% from the year-ago reported figure. Baltimore, MD-based MKTW provides financial tools, education, research and other products for different markets. The Zacks Consensus Estimate for MKTW’s current-quarter revenues stands at $135.3 million.

The consensus mark for Automatic Data Processing’s 2022 earnings is pegged at $6.97 per share, indicating a 15.8% increase from the year-earlier reported figure. ADP’s earnings beat estimates in each of the last four quarters, the average being 6.2%.


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