Mastercard (MA) & HUBUC Partner to Aid Fintechs in Europe

Mastercard Incorporated MA recently collaborated with HUBUC, a well-established embedded financial services provider, in a bid to boost growth prospects of several fintech companies across Europe. HUBUC also became an official partner of the Mastercard Fintech Express program in a bid to support its endeavor.

The tie-up will pave the way for companies to roll out innovative Fintech and B2B Software-as-a-Service (SaaS) products across several European countries. The strong brand name, extensive network and global presence of Mastercard, which makes it the preferred choice of partner for fintechs, combined with the innovative platform of HUBUC is likely to yield great results.

The alliance is expected to be advantageous for both Mastercard and HUBUC. On one hand, collaborations with several fintechs have helped Mastercard in enhancing its capabilities and penetrating further into the underserved areas through technological offerings. Thereby, its extensive network and global presence continue to benefit from such tie-ups. On the other hand, the recent move will enable HUBUC to offer a single component or combine an array of embedded finance components.

This joint effort will lead to upgradation of new clients’ product offerings via secured and programmable virtual and physical cards, thereby resulting in efficient management of business spending and innovative employee benefits. The tie-up intends to help companies seeking to integrate payment offerings for conducting digital payments and management of corporate expenses. This will help in bringing more fintechs under the ambit of a growing digital economy, which is a mutual goal of Mastercard and HUBUC.  

The latest move reinforces Mastercard’s sincere efforts to extend innovative payment solutions, revolutionize payment experiences and bolster footprint across Europe.

The partnership is a timely one as well, considering the rise in businesses joining forces with embedded finance companies to provide financial services. It usually takes significant time and massive costs to build a fintech arm within an organization. To address these challenges, embedded finance has come to the fore. The concept entails hassle-free integration of financial services into digital platforms as a result of which the platforms can intrinsically offer financial services to its clients.

Mastercard has remained committed to providing necessary assistance to fintechs through the Mastercard Fintech Express program. The assistance ranges from offering technological assistance to helping them in rolling out new products and enhanced payments solutions. It has also undertaken substantial investments to support growth prospects of fintechs. Over the passage of time, several fintechs including Marqeta, Paymentology, Global Processing Services ("GPS")  and others have joined the Mastercard Fintech Express program.

The help extended to fintechs seems to be the need of the hour as well in view of the promising prospects in the global fintech market. Per The Business Research Company, the market is expected to attain a 10.2% CAGR within 2025. Tailwinds such as increasing popularity of digital payments leading to robust e-commerce growth and substantial investments undertaken by banks and firms in technology-backed solutions are anticipated to continue driving the fintech market in the days ahead.

Zacks Rank & Price Performance

Shares of Mastercard, which carries a Zacks Rank #3 (Hold), have gained 3.3% in a year against the industry’s decline of 8.4%.

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks in the financial transaction services space include EVERTEC, Inc. EVTC, Green Dot Corporation GDOT and Equifax Inc. EFX, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

EVERTEC, Green Dot and Equifax have a trailing four-quarter earnings surprise of 28.42%, 64.53% and 17.71%, on average, respectively.

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