WEX Inc. WEX’s Australian unit was granted a license for issuing cards of MasterCard Incorporated MA in Australia. However, this news failed to drive shares, owing to broader market dynamics.
WEX Finance Inc. – the Australian subsidiary of WEX – received this license after regulatory changes to the access regimes of MasterCard and Visa Inc. V were implemented by the Reserve Bank of Australia. These regulatory changes were introduced early this year.
WEX already has a strong foothold in the Australian market. As stated by management during the fourth-quarter earnings call, Australia is the only country where WEX generates a significant amount of revenues and earnings.
Amid the foreign exchange headwinds which are weighing on the results of the other operating subsidiaries, WEX aims a competitive advantage by strengthening its already strong presence. Since WEX and MasterCard have thrived through their global partnership and virtual payment solution expansion, the latest license should help WEX prosper in the Australian market.
Enhanced relationships with payment industry primes like MasterCard and Visa, amid increased competition in the Australian market, should help WEX process more transactions and thereby boost its top line.
WEX currently carries a Zacks Rank #5 (Strong Sell). A better-ranked stock in the financial transaction services space is The Western Union Company WU, which carries a Zacks Rank #2 (Buy).
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