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Mastercard Rolls Out Platform for Easing B2B Payments

Zacks Equity Research

Mastercard Inc. MA recently introduced the commercial version of Mastercard Track Business Payment Service. The platform has been launched in the United States with several distribution partners across the B2B channel.

Track Business Payment Service was initiated as a trade platform by Mastercard in 2018 for simplifying payment processes. Notably, the plan to launch this digital platform was taken in the previous year.

Encompassing several business payments products, Track Business Payment Service intends to offer a simplified payment procedure for the business world through digital means. While buyers will be able to pay more efficiently and avail early payment discounts, suppliers are likely to get a clear idea about the invoices received from several buyers along with their proper identification.

Earlier, B2B payments involved a lot of manual effort and consequently, were time consuming. Easy receipts of funds through this digital transformation will also enable business owners to manage cash flows and achieve operational efficiencies.

Track Business Payment Service has been introduced in the United States with the help of card payment rails. Later in this year, Automated Clearing House (“ACH”) payments will be added to this digital platform followed by cross-border payments in 2021.

Apart from the United States, Mastercard has been making every effort to introduce this platform to other parts of the world as well. Such initiatives, in turn, are likely to strengthen the company’s global foothold.

Moreover, Mastercard has been focused on promoting contactless payments among its vast network of consumers amid the COVID-19 pandemic. The rollout of this new payment platform particularly bodes well for businesses of all scale, especially when the United States is grappling with financial turmoil induced by the COVID-19 outbreak.

Furthermore, the company’s efforts to enhance digital business are likely to drive top line in the days ahead. In first-quarter 2020, Mastercard’s revenues of $4 billion improved 5% year over year. This upside was driven by an increase in gross dollar volume, switched transactions and other revenues. Despite the COVID-19-induced business disruption that adversely impacted the company’s cross-border revenues, overall earnings gained from expansion in gross dollar volumes.

Shares of this Zacks Rank #4 (Sell) company have gained 11.3% in a year compared with the industry’s growth of 3.5%. We believe the company’s strong fundamentals are likely to sustain momentum in the long haul.

Performance of Other Players

Some stocks in the same space are Global Payments Inc. GPN, The Western Union Co. WU and Visa Inc. V. All these stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Global Payments, Western Union and Visa surpassed estimates in the last reported quarter by 3.95%, 7.32% and 2.96%, on average, respectively.

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