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Mastercard Incorporated MA recently inked a Memorandum of Understanding (“MoU”) with the Caribbean Association of Banks Inc. (“CAB”), the representative body of banks and other financial institutions in the region.
Shares of Mastercard declined 1.1% on Jun 13, replicating declines in broader markets.
The partnership with the CAB provides an opportunity to Mastercard to leverage its technology, expertise and resources for the seamless integration of Mastercard Cross-Border Services within the product suite of Caribbean banks. Simultaneously, the tech giant will also make its knowledge and educational platforms available to the region’s citizens and small business owners. This, in turn, is likely to make them acquainted with the benefits of using MA’s cross-border services offering and other digital financial tools.
The ulterior move behind the collaboration remains to extend advanced financial services and pave the way for seamless cross-border payments for customers across the member jurisdictions of the CAB. A diversified client base comprising consumers, small and medium-sized enterprises, government agencies and commercial entities can reap the benefits of faster and more reliable cross-border money transfers.
Mastercard also intends to complement one of its longstanding endeavors through the latest move, which is to bring the unbanked and the underbanked within the ambit of a booming digital economy.
By extending solutions tailored to meet the specific needs of markets in different parts of the world, Mastercard has successfully established a solid foothold across the global digital payments market. An expanding digital economy spurred by increased Internet penetration and higher adoption of mobile phones might have lured Mastercard to delve deeper into the region via the MoU.
The recent tie-up seems to be a tmely move on the part of Mastercard and will further solidify the footprint of the tech giant in the Caribbean region. Concerns related to intra and inter-regional payments, the high cost of fund transfer and multiple intricacies in the way of making cross-border payments across the CAB jurisdictions make an affordable and tech-based solution the need of the hour for Caribbean people.
Mastercard’s innovative digital suite built on collaborations and substantial investments makes it the preferred choice for infusing digitization across several markets by financial institutions worldwide.
In April 2023, MA inked a MoU with the national payment switch of Ethiopia, EthSwitch, to enable the latter bring about secure, fast as well as seamless domestic and cross-border digital money transfers across the country through leveraging the Mastercard Send platform.
Shares of Mastercard have gained 14.2% in a year, compared with the industry’s 6.3% growth. MA currently carries a Zacks Rank #3 (Hold).