Mastercard Reveals Virtual Card Solution; Street Says Buy

Digital payments company Mastercard Inc.(NYSE: MA) has revealed its next-generation virtual card solution, Track Instant Pay. The new solution uses machine learning and straight-through processing to enable instant payment of supplier invoices.

Following the news, shares of the company rose almost 1% on Thursday. However, the stock pared its gains slightly to close at $362 in the extended trading session.

Mastercard is slated to report its upcoming earnings on January 27, 2022.

Strategic Impact

Mastercard’s Track Instant Pay is an open-loop B2B network aimed at making the process of business payments automated and more efficient for the buyers and suppliers.

Notably, the solution leverages the power of machine learning and straight-through processing to send digital payments directly and securely to a supplier’s bank account via a Mastercard virtual card without any manual intervention.

Management Commentary

The Executive Vice-President of New Payment Flows, North America at Mastercard, Ron Shultz, said, “Delayed payments create significant challenges for businesses financially and operationally, especially in today’s environment. Track Instant Pay helps solve these pain points by enabling buyers and suppliers to automate their manual payment processes, unlocking valuable time, working capital and choice. This innovative new solution is the latest step in our ongoing commitment to support multiple payment rails and mission to modernize B2B payments.”

Stock Rating

On January 20, Cowen & Co. analyst Georgios Mihalos reiterated a Buy rating on the stock. The analyst, however, lowered the price target from $456 to $444, which implies upside potential of 22% from current levels.

Consensus among analysts is a Strong Buy based on 13 unanimous Buys. The average Mastercard price target of $433.38 implies upside potential of 19.1% from current levels. Shares have gained 8.8% over the past year.

Negative Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on MA. Further, 3.6% of portfolios tracked by TipRanks increased their exposure to MA stock over the past 30 days.

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