) is looking to expand its digital services in Europe. The company
has secured a five-year deal with U.K. mobile operator Everything
Everywhere which runs the popular Orange and T-mobile services.
Everything Everywhere will initially allow its 27 million strong
customers to access pre-paid money accounts via near-field
communication (NFC) technology through their smartphones. This
agreement is an extension of previous understanding between the two
companies, wherein MasterCard provides the technology for Orange
customers to make payments through NFC devices via
Our price estimate for MasterCard is $451
, in-line with the current market price.
See our complete analysis for
Initially, around 100,000 retailers across the country will
support this technology, and the number is expected to grow rapidly
over the next few years. Shoppers using mobile phones to complete
payments are 14% more likely to convert a purchase than non-mobile
phone users, according to a study by Deloitte. The percentage of
credit card customers using their mobile phones to complete
transactions has increased from 4% in 2011 to 7% in the current
year. These findings will influence merchant acceptance of the
exciting new technology.
MasterCard's closest competitors, Visa (
), Discover Financial (
) and American Express (
) are also looking to grab a share of the market. Visa plans to
launch a mobile application, V.me, later this year. The application
will allow users to access various payment networks through their
mobile phones and make payments at cashless NFC-enabled counters.
Discover has entered an agreement with Ebay (
) to allow its customers to access PayPal through their mobile
phones. With both merchants and card operators looking to expand
aggressively, we expect a steady growth rate in transaction volumes
over the next few years. Credit cards account for 42% of our $39
price estimate for Discover Financial's stock , which is in-line
with the current market price.
You can gauge the effect of a change in forecast by modifying
the charts above.
Submit a Post at Trefis Powered by Data and Interactive
Understand What Drives a Stock at Trefis
The percentage of credit card customers using their mobile
phones to complete transactions has increased from 4% in 2011 to 7%
in the present year.