In an effort to provide easy digital payment mechanism to its customers, Mastercard Inc. MA is expanding its Digital First Card program by collaborating with a number of payment processors. Digital-First is a Mastercard program that provides a complete digital experience in the world of payment methods.
The payment processors aiding Mastercard in this process are CoreCard, FIS, Fiserv, Galileo, i2c, Marqeta, PTS and TSYS, a subsidiary of Global Payments Inc. GPN. Via these payment processors, Mastercard will ensure that customers can enjoy the best-in-class digital banking experience including near-instant access to card information, the flexibility to shop with ease and the peace of mind to securely transact, et al.
Mastercard’s Digital-First program is an innovation aimed to make a change in the consumers’ mindset as it revolutionizes the way people think when making payments today. It allows the customer to get a 100% digital product. This implies that financial institutions can issue physical cards without complete customer data since this information is stored exclusively in virtual form — under strict security and authentication protocols — and it is only visible in the app.
The physical card even if demanded and held by the customer will differ from the current cards in circulation. These cards will not carry the usually printed data, such as the account number, card number and CVC (or security code) nor the expiration date. Also, the card holder has the option to personalize his/her name on the card.
A critical component of its design, digital card incorporates an extra layer of security through interoperability with the tokenization standard. Tokenization replaces sensitive payment information with a unique identifier or token, protecting the underlying data. The process of tokenization generates a unique code for each transaction, which makes it more secure and unrepeatable.
Furthermore, the payment process uses the device technology (like a smartphone, for example) to increase the security of the commerce ecosystem through a series of device-specific features and advanced authentication mechanisms including biometrics such as Face ID or Touch ID among others to be able to approve payments and even enter the application.
Via its Digital-First program, Mastercard aims to stay ahead of the fast-changing payments industry, which in recent years went the digital way. Moreover, the outbreak of COVID-19 only accelerated the digital shift as consumers are increasingly shopping online to avoid physical contacts. This transition to the digital mode of payments is permanent and will therefore continue to stay even after the pandemic subsides.
In July, Mastercard launched its first Digital-First program in Chile with Banco Falabella.
Another company in the same space, Visa Inc. V, is providing digital-first commerce through its Digital Commerce Program.
Mastercard carries a Zacks Rank #3 (Hold), currently. The stock has gained 19.7% in a year compared with the industry’s growth of 6.5%.
A better-ranked stock in the same space is Envestnet Inc. ENV. It sports a Zacks Rank #1(Strong Buy), presently. Earnings of the company surpassed estimates in each of the trailing four quarters, the average being 14.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
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