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Mastercard Ties Up With R3 to Ease Cross-Border Payments

Zacks Equity Research

Mastercard Inc. MA recently entered into a collaboration with R3, a market leading enterprise blockchain software provider, to create and direct a blockchain-abled cross border payments plan with focus on connecting international payments infrastructures, banks and schemes. These are backed by a clearing and settlement network managed by Mastercard.

This model is expected to support financial institutions to deliver a singular and frictionless real-time transaction plan. This move is in line with the company’s multi-rail strategy, which aids customers with a wide array of transaction options. Mastercard is committed towards providing unique payments solutions.

The unique combination of R3’s knowhow in blockchain along with Mastercard’s current payment systems brand, assets and allocation will provide the customers with innovative services, catering to various factors like high processing overheads, liquidity management and the current reduction of standardization and methods between banks and domestic clearing systems.

This initiative follows the company’s buyout of Transfast, a global cross-border money transfer network, in early 2019. This strategic effort adds stimulus to Mastercard’s abilities by lending access to R3’s Corda ecosystem. It consists of more than 300 financial services organizations, technology entities, central banks, regulators and trade guilds.

Notably, the company constantly makes attempts to improve global connectivity. Mastercard has been showing a significant progress in implementing its digital strategies and consistently investing in technology.
With MasterPass, the company became the first network to deliver a digital payment service across all devices and channels. It is also investing in tokenization technology with its Mastercard Digital Enablement Service (MDES), which supports contactless payments and Digital Secure Remote Payments.

Moreover, the company plans to offer token services on all its cards by 2020, allowing consumers to store credentials with merchants without exposing their actual card details. Further, Mastercard will roll out its solution named Mastercard Identity Check globally in 2019, which uses data-rich EMV 3D secure authentication standard and applies AI plus behavioral biometric capabilities to verify the respective customer with a single touch or a click. The company’s regular investments in technology will keep it at the forefront in the dynamic payments industry.

Shares of this Zacks Rank #3 (Hold) company have rallied 24.3% in a year’s time, outperforming its industry’s growth of 16.1%.


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