MasterCard Incorporated MA inked a new 20-year deal with Itaú Unibanco to set up a new electronic payments network in Brazil. This deal reflects the strengthening of a decades-old bond between the two companies.
Established in 2008, Itaú Unibanco is Brazil’s largest lender by market value with operations in 19 countries across the Americas, Asia and Europe. Itaú Unibanco is a universal bank which provides an array of services and products to a wide range of varied client profile comprising both individuals and companies of various sizes.
Per the deal, MasterCard will be responsible for managing the operations of the new network and transaction routing. Itaú, on the other hand, will take care of payment solutions like credit, debit and pre-paid cards and also concentrate on improving the payment value chain efficiency.
Moreover, with this alliance Itaú will not only be able to benefit from MasterCard’s experience in managing leading payment brands but will also gain access to new payment technologies.
This deal will also benefit MasterCard by enabling it to strengthen its presence in the Brazilian market. Moreover, MasterCard together with Itaú will provide credit and debit cards to consumers and businesses of all sizes. Itaú is one of the largest banks in Brazil with 5,000 full-service branches and 28,000 ATMs. The bank is expected to increase the number of MasterCard’s processed transactions which rose 12% in 2014.
MasterCard has been consistently strengthening its geographic footprint as well as expanding its existing alliances. On Mar 4, the company signed a new and expanded 10-year agreement with Citigroup Inc. C. Per the agreement, Citigroup will align its consumer proprietary credit and debit portfolios to MasterCard network.
Currently, MasterCard carries a Zacks Rank #3 (Hold).
Other Stock to Consider
Better-ranked stocks in the same sector include Ingenico S.A. INGIY and The Western Union Co. WU. Both the stocks hold a Zacks Rank #2 (Buy).
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