October 21, 2020

Mastercard (MA) to Spur Digital Transactions in Sri Lanka

Mastercard Incorporated MA recently extended its alliance with Central Bank of Sri Lanka (CBSL) in a bid to accelerate digital transactions across Sri Lanka. A case in point is Mastercard’s extension of support to the ‘Cash Wade’ campaign rolled out by CBSL in March. Notably, shares of Mastercard gained 1.1% in the last day’s trading as of Sep 24.

In addition to supporting the campaign that demonstrates the advantages of digital transactions over physical handling of cash, Mastercard has commenced another initiative for backing consumers and businesses across Sri Lanka in adopting digital transactions.

It has rolled out a cashback rewards promotion, which can be availed at the time of utility bill payments. Payments of INR 1,000 and above to selected utility service providers made by cardholders will be entitled to a cashback benefit of INR 250. To name a few, Ceylon Electricity Board (CEB) and Sri Lanka Telecom are two of the selected partners, among many others.

Moreover, it has to be kept in mind that those who make payments through the selected partner merchant’s website or mobile app and also use Mastercard’s debit or credit card issued in Sri Lanka will be able to avail the above-mentioned cashback reward.

It’s worthy of mentioning that Mastercard and CBSL share a common endeavor of enforcing increased digital payments. Also, Mastercard has a fortifying presence in the Sri Lanka market as it has been working closely with local partner banks, non-banking financial institutions, mobile networks, fintechs and merchants across the country.

Needless to say, the company has also rolled out solutions aimed at stimulating economic growth for Sri Lanka’s people and businesses. The enhanced solutions have not only paved the way for cross-border and person-to-person money transfers through Mastercard Send but also allowed greater number of small- and mid-size enterprises to adopt digital means via Mastercard Payment Gateway Services.

Notably, Mastercard joined forces with Takas.lk and Mobitel last year. All these collaborations were intended to facilitate faster adoption of cashless payments across Sri Lanka.

Shares of this company have gained 20.3% over a year compared with the industry’s 5.8% growth.

 

Among its peers, Visa Inc. V has rallied 11.6% in a year’s time, while American Express Company AXP and Discover Financial Services DFS have lost 19.9% and 35%, respectively, in the same time period.

The latest move not only highlights Mastercard’s efforts to strengthen presence across Sri Lanka but also clearly hints on the keen eye that it has for addressing the growing demand for cashless payments in the Asia Pacific region amid the COVID-19 pandemic. It has been investing heavily to embrace newer technologies and partnering with several organizations for capitalizing on the current prospects in the business-to-business (B2B) payments market of Asia Pacific.

A case in point is Mastercard and SBM Bank India’s collaboration last week to launch SBM World Debit Card, which will club niche banking solutions and carefully curated lifestyle privileges including some of the finest shopping as well as dining opportunities. This launch will help Mastercard penetrate further into the market of India, which also lies in the Asia Pacific region.

Not only the Asia Pacific region but the entire globe has been witnessing a surge in digital transactions for quite some time and the pandemic has only accelerated the same. This trend is likely to sustain even beyond the pandemic. This positions the Zacks Rank #3 (Hold) company well for long-term growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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