Mastercard's Fintech Ties in Emerging Markets: Bold Move or Risky Bet?

As the competition in the global fintech landscape heats up, Mastercard Incorporated MA is strengthening its partnership with fintech companies in Africa, Pacific Asia and Latin America, aiming to tap into the growth of the most dynamic digital finance markets. It focuses on everything from digital wallets and mobile payments to platforms that promote financial inclusion.

In Africa, the company has joined forces with MTN Group, SAVA, Scale and many more to expand access to digital payments. In Asia, its collaborations with Grab and various regional neobanks reflect a push for scalable and inclusive growth. As smartphone usage and mobile banking become more common, these partnerships with fintech companies are helping MA weave itself into the everyday financial routines of people, driving transaction growth.

MA’s cross-border volume rose 15% year over year on a local currency basis in the first quarter of 2025.  Its gross dollar volumes (GDV) from the Asia Pacific, Middle East and Africa region rose 3% in 2023, 3.2% in 2024 and 2.8% in the first quarter of 2025. Similarly, its focus in Latin America is paying off, where GDV rose 21.6% and 10.2% in 2023 and 2024, respectively.

Mastercard is also stepping up by introducing Buy Now Pay Later options specifically designed for emerging markets, aimed at meeting the rising demand for flexible credit. Its push into emerging markets isn’t just about expanding its reach; it’s a calculated move aimed at shaping the future of global payments. Economic instability, inconsistent regulations and gaps in infrastructure across these regions can create significant hurdles.

How Are Competitors Faring?

Some of MA’s competitors in the emerging market space include Visa Inc. V and PayPal Holdings, Inc. PYPL.

Visa is also on a mission to broaden its reach in emerging markets by teaming up with fintech companies. Its partnerships with Vodacom-South Africa, Caixa-Brazil and Bcash-Bangladesh further extend its global network. The cross-border volume of Visa rose 13% YoY in the second quarter of fiscal 2025.

PayPal is pushing cross-border payments and financial inclusion by partnering with fintech companies across Africa, the Middle East and Asia. These partnerships are to make cross-border transactions easier, ensuring secure and smooth fund transfers and helping small and medium-sized enterprises thrive. PayPal’s international net revenues grew 3% year over year in the first quarter of 2025.

Mastercard’s Price Performance, Valuation & Estimates

In the year-to-date period, MA’s shares have gained 7.3% compared with the industry’s growth of 5.5%.

From a valuation standpoint, MA trades at a forward price-to-earnings ratio of 32.49, above the industry average of 22.88.

The Zacks Consensus Estimate for Mastercard’s 2025 earnings implies 9.5% growth from the year-ago period. It witnessed one upward estimate revision in the past month against no movement in the opposite direction.

Mastercard currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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