Mastercard Inc. MA has announced a new partnership agreement with tonik, a two-year-old startup, which recently received a bank license in the Philippines.
Per the pact, Mastercard will further enhance tonik's market proposition by enabling the latter to issue a range of electronic payments products that utilizes the company's global network and extensive business intelligence when tonik launches operationally later this year.
The Philippines is one of the attractive markets for Mastercard given that the region has impressive internet penetration (67%) with one-third of the population being millennials and most being digital savvy. Also according to a 2017 Bangko Sentral ng Pilipinas (BSP) survey, more than 70% of the country's population is unbanked. At the same time, 60% of Filipinos who are either in the formal banking system or can become part or the ecosystem, are willing to use offerings that are digitally driven. By 2023, the strength of people with formal bank accounts is expected to double.
tonik is a perfect fit for Mastercard considering that the latter is a mobile-only digital bank and is able to develop highly customized, scalable banking solutions for its customers. With Mastercard, it can inject more speed, scale and performance into all facets of its business. The entity is poised for significant growth achievement with access to Mastercard's global payment network, safety & security technology, data and analytics services, AI technology and cybersecurity capabilities.
Notably, this smartphone-exclusive online bank will roll out its complete suite of banking services including a transactional savings account with a debit card, savings and term-deposit accounts with attractive interest rates as well as an array of consumer loans in third-quarter 2020. Debit Mastercard cards will be available to customers by the end of the year and will allow them to transact and withdraw cash from any place where Mastercard is accepted. Additional services, such as loans, credit cards and fund transfer categories will be made available during 2021.
This deal under discussion adheres to Matsecard’s global initiative, Mastercard Accelerate, which simplifies the company’s operations with fintechs, giving them admittance to everything that they need for growth acceleration.
Offering a simple, single entry-point to the company’s wide portfolio of specialized programs, Mastercard Accelerate gives start-ups and emerging brands the much-needed guidance at every stage of their progress and transformation right from arrival in the market to global expansion.
Other companies like Visa Inc. V and American express Co. AXP also unveiled a similar program to promote fintechs.
Mastercard currently carries a Zacs Rank #3 (Hold) and has gained 11.4% in the past three months compared with the industry’s growth of 11.7%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better ranked stock in the same space is Equifax Inc. EFX. The stock surpassed estimates in the last reported quarter by 8.53%.
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