In a bid to enter the booming digital payments industry, Citigroup C is offering merchants a range of digital payment collection modes such as cards, e-wallets and other innovative bank transfers.
The company will use Mastercard’s MA Payment Gateway Services, thereby enabling institutional clients to accept global payments. Mastercard’s payment platform comes with 180+ acquirers already integrated, simplifying the onboarding experience, per the release.
Citi’s new service eliminates the hassles that merchants usually face. They will have access to the payment network through a single platform, leveraging Citi’s on-the-ground presence, expertise and relationships with payment providers.
Moreover, the company plans to connect this service with proprietary transaction services and FX businesses to make it more attractive.
“We want to extend our leadership beyond the B2B payment space by developing capabilities to enable institutions to collect from consumers in a globally consistent and seamless fashion,” said Naveed Sultan, Global Head of Citi’s Treasury and Trade Solutions.
Recently, another Wall Street biggie — Goldman Sachs GS — marked its presence in the consumer finance industry by offering a first ever credit card in partnership with Apple. The card comes with simple application process, no fees, low interest and guaranteed security.
Acknowledging the growing demand and popularity of digital consumer payment modes, Citi is offering a service that will be more widely accepted than other digital wallets such as Apple Pay and PayPal.
Citi’s restructuring, streamlining efforts and strategic investments in core business will likely support profitability. Further, we believe that the company is well poised to address its internal inefficiencies and setbacks. However, muted fee income growth and persistent legal hassles pose concerns.
Over the past six months, the stock has lost 14.6% compared with 9.9% decline recorded by the industry.
Currently, Citi carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A Stock to Consider
Fifth Third Bancorp FITB has witnessed slight upward estimate revisions for current-year earnings over the past 60 days. Over the past three months, the company’s share price has been up 6.9%. It currently carries a Zacks Rank of 2 (Buy).
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