Subscribe to Entrepreneur for $5
Subscribe

Mastercard (MA) Inks MOU to Ease Digital Payments in Japan

Mastercard (MA) partners with Wakayama Prefecture to not only ease digital payments in the prefecture's tourism sector but also upgrade the payment operations of SMBs within it.

By
This story originally appeared on Zacks

Mastercard Incorporated MA recently inked a Memorandum of Understanding (“MOU”) with Japan’s Wakayama Prefecture, which is home to globally renowned World Heritage Sites. The five-year strategic collaboration intends to utilize MA’s global standard payment network for driving digital transformation amid the tourism sector, and small and medium-sized businesses (“SMBs”) within the Wakayama Prefecture.

- Zacks

This deal marks Mastercard’s first alliance with a Japanese prefecture. Both parties will team up to develop an infrastructure, which paves the way for hassle-free digital payments, in an effort to revive the local tourism industry. This will be of great help to overseas tourists to make payments across regional cities. Additionally, the cash-back program of Mastercard (Mastercard Travel Rewards) will be utilized to offer cash rewards to foreign visitors (holding a Mastercard card), which in turn will serve as an incentive to spend more at Wakayama Prefecture’s stores. The prospects of the program appear bright as it involves numerous overseas banks and card issuers as participants, and is extended to cardholders in over 30 markets.

The latest tie-up also intends to digitize payment and settlement operations of SMBs in the prefecture, thereby resulting in increased and secured cashless transactions. Advanced technologies will be utilized to bring about efficiencies in payments operations of SMBs, which in turn, will lead to enhanced accounts payable efficiency, reconciliation processes and data analysis. Thus, the business owners will benefit from streamlined billing operations and greater sales opportunities and will be shielded from headwinds stemming from pending payments.

Initiatives similar to the latest one reinforce the solid reputation that Mastercard has earned as a leading international payment technology company over the years. Per Wakayama Prefecture’s management, MA’s sound insights into international travel and consumer trends coupled with its vast network of overseas credit card companies make it a perfect match for bolstering the prefecture’s growth prospects. The recent deal is likely to lead to increased utilization of Mastercard cards in the prefecture, which is anticipated to fetch higher transaction processing fees (one of the significant drivers of MA’s top-line growth) for the company.

The latest deal clearly highlights Mastercard’s sincere efforts to revive the tourism sector and SMBs, which were severely hit by the COVID-19 induced volatilities. While severe restrictions on cross-border movement were imposed amid the pandemic that affected the tourism industry, SMBs grappled with inadequate resources and financial uncertainties. With digitization being infused into every sphere of life and the global economy witnessing a recovery phase, MA’s efforts to help the tourism space and SMBs of Wakayama Prefecture out of the pandemic-induced rut and flourish amid an improving digital economy seem to be a well-timed move.

Driving digital transformation remains one of the primary motives of Mastercard. In sync with the same, it keeps on partnering with numerous well-established organizations and delivering several innovative digital payment solutions. MA undertakes substantial investments and forays into underserved areas via technological offerings.

Similar to Mastercard, other companies such as Visa Inc. V, Global Payments Inc. GPN, and American Express Company AXP have also been pursuing digital transformation efforts and launching several contactless payment solutions from time to time.

Visa makes use of advanced technologies for rolling out newer payment solutions. V has been striving hard to integrate blockchain technology within the payments platform. The launch of diversified payment alternatives, including mobile payments through Visa Checkout and Visa payWave, highlights the company’s commitment to ensure enhanced online checkout experiences for consumers.

Global Payments is a pure-play payments technology company boasting deep expertise in payments technology. GPN continues to roll out a wide array of payments technology and software solutions for customers on a worldwide basis backed by its expertise. Global Payments has joined forces with several organizations for extending its nationwide reach in the digital payments space.

American Express pursues a series of measures focused on technology advancements, the introduction of secure digital solutions and assistance in businesses to regulate payments. AXP unveiled the proprietary automated accounts payable (“AP”) solution in 2020 for automating the accounts payable process with an innovative, end-to-end solution. These initiatives bolstered the digital suite and the global foothold of American Express.

Shares of Mastercard have lost 6% in the past six months compared with the industry’s decline of 16.9%.

Zacks Investment ResearchImage Source: Zacks Investment Research

MA currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

While American Express stock has inched up 1.1% in the past six months, shares of Visa and Global Payments have lost 12.3% and 22.9%, respectively, in the same time frame.



Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

See 3 crypto-related stocks now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

Mastercard Incorporated (MA): Free Stock Analysis Report

 

Visa Inc. (V): Free Stock Analysis Report

 

American Express Company (AXP): Free Stock Analysis Report

 

Global Payments Inc. (GPN): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research