MasterCard to Explore Mobile Payment Technology with ANZ

By Trefis Team,

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MasterCard (NYSE:MA) recently announced its partnership with ANZ Bank to allow customers to make payments using their mobile phones. The company has already started conducting trials of its PayPass contactless payment technology which will allow participants to use their mobile phone to make purchases of up to $80 by simply tapping the device in front any MasterCard PayPass terminal. MasterCard is the second largest payment processing provider and competes with Visa (NYSE:V), Discover Financial ( DFS ) and American Express ( AXP ).

We have a price estimate of $287 on MasterCard's stock , which is about 7-8% above the current market price.

MasterCard is trying hard to make its mark in the mobile payment industry

Mobile phones have become a versatile tool for the financial services industry that can offer a broad range of payment capabilities. Visa beat its competitors to the pole in the emerging mobile banking segment through its acquisitions of Fundamo, CyberSource and PlaySpan. (See Visa Pushes for Mobile Banking by Acquiring Fundamo)

MasterCard's mobile-based offerings are less discrete with the company offering person-to-person transfer service in Norway and Brazil. In a bid to ensure a share in the 12 Latin American countries where the market for mobile financial transactions is expected to reach $63 billion by 2014, MasterCard setup a mobile banking joint venture with Telefonica earlier this year.

And this partnership with ANZ might just provide it with what it takes

An alliance with ANZ Bank gels well with MasterCard's goal of having a global presence in the mobile banking industry. We estimate that the number of transactions processed by MasterCard has a potential to reach 58 billion by the end of our forecast period from its current level of 23 billion because of the fast growing market for mobile payments. In the chart above you can drag the trend line to see how this forecast impact's MasterCard's price estimate.

See our full analysis of MasterCard

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Investing Ideas , Stocks , US Markets
Referenced Stocks: AXP , COF , DFS

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