Mastercard is making a move into point-of-service financing after acquiring installment payments platform Vyze. Mastercard stock inched up on the stock market.
Vyze allows merchants to offer customers a range of credit options both in stores and online by connecting them with multiple lenders. It provides merchants with simple APIs to reroute credit requests to banks.
Currently nonbank fintech startups are dominating the buy-now-pay-later market. The space represents a $1.8 trillion opportunity, according to research firm Accenture.
“Vyze adds to our ability to empower banks and other lending partners to participate in the growing trend of retail financing,” said Blake Rosenthal, Mastercard’s executive vice president of global acceptance, in a press release. “The combination of their platform with our technology and network complements our existing payments programs.”
Mastercard believes the acquisition, whose terms were not disclosed, will help it be a better strategic partner to both lenders and merchants. It said Vyze offers financing approval rates that are well above the industry average.
Mastercard stock closed up 0.4% at 240.08 on the stock market today. It is now well clear of a 210.01 buy point after breaking out from a 17 week double bottom base, MarketSmith analysis shows. Its relative strength line has been on a strong upward trend, which is a bullish sign.
Another positive sign for Mastercard stock is the fact it is trading above both its 50-day and 200-day moving averages. Its 50-day line recently moved higher than its 200-day.
Mastercard stock has a top-notch IBD Composite Rating of 98. The Stock Checkup Tool shows earnings have been strong, growing an average of 40% over the past three quarters. Its three year EPS growth rate of 26% is also impressive. Its stock market performance is almost as impressive, which is why it holds a Relative Strength Rating of 91.
Mastercard Stock Growth Boost
According to Goldman Sachs analyst James Schneider, Mastercard stands to benefit from increasing share in the “underpenetrated” European market.
He also believes it is perfectly poised to lead in another currently unrealized market.
“We continue to see upside to Street estimates over the next 12 months driven by core consumer volume and exposure to Europe and other growth markets,” he said in a research note last September. “In addition, we believe the B2B market represents the next growth horizon for the payments industry and think Mastercard is the best positioned given its multifaceted product approach.”
He sees these two catalysts as fueling midteens revenue growth and 20% EPS growth over the next five years.
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