DFS Discover Financial Services

Recently, MasterCard Inc. (MA) announced a number of partnerships and product launches. The transactions are aimed at expanding the operations of the company and enhance client base.

First, MasterCard announced a strategic alliance with VimpelCom, one of the largest integrated telecommunications service providers of the world. The partnership aims at providing newer and better payment solutions to the 212 million customers of VimpelCom across 18 countries.

The first program under this liaison would be launched in 2013 by partnering with Cartal LIS Italy to provide prepaid services to the customers of Wind Italy, an Italian telecom operator.

Second, MasterCard also joined hands with Equity Bank to introduce mobile point of sale (MPOS) technology to the Kenyan market, thereby promoting electronic mode of payment in the country. For this purpose MasterCard and Equity Bank have collaborated with Ezetap, one of the leading providers of mobile-based Payments services.

Small merchants in Kenya are dominating the African market in terms of adopting cost-effective and flexible payment solutions technologies. But they were unable to offer cashless transactions to their consumers until now. The introduction of MPOS will enable these merchants to provide this convenient shopping experience to customers towards improvement in sales.

Third, it also announced that eServGlobal and Oltio, both renowned mobile payment technology providers, have joined the Mobile Money Partnership Program (MMPP) of MasterCard. MMPP, launched in Feb 2012 allows consumers to access essential financial services using their mobile phones.

The partnership will help MasterCard to expand and accelerate its programs for financial inclusion in mobile phones usage.

Finally, it also announced the launch of a payment service program, Near Field Communication (NFC) in Brazil. To launch this program, MasterCard will use its Mobile PayPass technology and partner with Itaú, a publicly quoted bank, TIM, Redecard, a payment processor and Gemalto, a digital services company.

The partnership and subsequent product launch will provide consumers with a more convenient, fast and secure payment option for shopping. Consumers need to tap their PayPass-enabled smart phones onto the merchant’s NFC enabled POS to make instant payments. The amount will be charged to the customer’s virtual account stored in his smart phone and processed via the account holder’s Itaú issued statement.

In Jan 2013, MasterCard announced its decision to provide other U.S. debit networks with some of the payment technology solutions owned by the company. MasterCard took such a step to support the prevalent trend of acceptance of EMV solutions, where EMV stands for Europay, MasterCard and Visa.

Another financial service provider, Discover Financial Services (DFS) launched the new Cadence Bank Debit Card through its alliance with Birmingham-based Cadence Bank in Jan 2013. Through this alliance, Discover Debit will provide network support to the Cadence debit card holders in the second quarter of the year.

MasterCard currently carries Zacks Rank #3 (Hold). Vantiv Inc. (VNTV) carries Zacks Rank# 1(Strong Buy), Fiserv Inc. (FISV) carries Zacks Rank #2 (Buy) whereas Discover shares the same Zacks Rank as MasterCard.

 
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