On Monday, card processing giant MasterCard Inc. (MA) announced its strategic five-year alliance with UK-based Vincento in an attempt to expand prepaid card opportunities in the European market.
Vincento is a new breed of bank that manages funds in an electronic format only, thereby breaking through easily-manageable banking solutions within e-commerce and in the emerging e-money sector. The company has launched an online product, Kalixa, through which Vincento’s online e-accounts will align with MasterCard’s prepaid card that functions on near field communication (NFC) process.
Accordingly, the consumers can now make secure payments and transfer funds through the NFC-oriented Tap & Go PayPass technology terminal at any of MasterCard’s merchants. This will enhance and ease the customer’s online banking experience. Vincento is among the first prepaid e-account issuers to introduce this new technology in alliance with MasterCard.
We believe the collaborated initiative is expected to be a valued advancement in the rapidly growing e-commerce arena. Additionally, it will also help the two entities explore newer markets apart from enhancing the services of the existing ones.
In November of last year, MasterCard and Vincento had allied with LAKS to launch UK’s first ever prepaid wristwatch – Watch2pay, which enables the consumers to make easy, simple and speedy payments up to ?15 with a tap of the wrist.
Given the regulatory challenges facing the credit and debit cards, the move of MasterCard to re-direct its synergies in the e-commerce space appears to be a viable option. Hence, through the rapidly growing e-commerce and m-commerce technologies, card giants such as MasterCard, Visa Inc. (V) and American Express Co. (AXP) are consistently establishing an alternative to the traditional banking model. The new technologies are also aiding the company in channelizing their resources to adapt to changing market dynamics and better penetrate the global markets.
Owing to the ongoing growth catalysts, MasterCard holds a Zacks Rank #3, which is equivalent to a near-term Hold rating, while the long-term stance remains Neutral.
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