Consistent with the recent market trend of making payments
through mobile phones,
) recently entered into a partnership with Deutsche Telekom, under
which the European customers of Deutsche Telekom will be able to
make payments via their mobile phones.
Per the agreement, ClickandBuy, an operating subsidiary of
Deutsche Telekom, will be responsible for issuing and marketing
Mastercard products under the Deutsche Telekom banner. These
services will initially be available in Poland and will commence in
By June next year, consumers in Germany will be provided with
"mobile wallet" services comprising mobile phone tags and cards on
a trial basis and subsequently, will be made available to various
financial institutions and partners. Consequently, the services
will be extended to other European countries.
The deal will not only mutually benefit the companies but also
provide an impetus to the mobile payment industry.
Mastercard remains focused on fulfilling the needs of its
customers and continue to add value amid a challenging economic
environment through an array of products, which are user-friendly
and flexible. Mobile banking is rapidly developing and changing the
card industry dynamics, and hence the combined market for all forms
of mobile payments is expected to double from the current levels to
more than $600 billion globally by 2013, according to Juniper
Apart from partnering with telecom providers to expand its
mobile payment services, Mastercard is also set to launch its
PayPass Digital Wallet in the third quarter of 2012 to tap the
latest technology and complement the market demand, while
simultaneously offering a wider, consumer-friendly and secure fund
transfer platform through the near field communication
(NFC)-enabled smartphones and other devices using the internet. We
believe that such long-term growth strategies are also crucial for
countering competitive pressures.
The company's position in the industry is threatened by its
American Express Company
) who are also on the lookout for opportunities related to this
technology. AmEx collaborated with Isis Mobile to provide Isis
Mobile Wallet to its customers in Utah and Texas later this year
whereas Visa entered into an agreement with Obopay Disbursements to
pay out electronic funds to a prepaid card.
Mastercard currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating. We retain our long-term Neutral
recommendation on its shares.
AMER EXPRESS CO (AXP): Free Stock Analysis
MASTERCARD INC (MA): Free Stock Analysis Report
VISA INC-A (V): Free Stock Analysis Report
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