Mastercard Incorporated MA recently announced that its contactless credit and debit cards will be accepted for fare payments on the MTR heavy rail network in Hong Kong, excluding the Airport Express. The new inclusion has already taken effect from Aug 24. 

This integration will allow Mastercard cardholders to effortlessly tap their contactless cards or payment-enabled devices on the card readers at the light blue entry or exit gates across MTR stations. Initially, each station will feature at least two gates compatible with this contactless card technology, expanding to more gates by the end of September 2024, especially at stations popular among tourists.

The integration of Mastercard as a payment option will enrich the travel experience for both local commuters and international visitors in Hong Kong. It aims to boost the city’s economic growth by providing a seamless travel experience. 

The recent launch reinforces the tech giant’s sincere efforts to extend modernized payment solutions to boost the uptake of digital payments across the globe. The focus of MA remains to infuse digitization within the transit system of Hong Kong. The company has often partnered with government and private sector entities of different countries to complement the abovementioned endeavor. Its enhanced digital suite has been built through constant tie-ups and significant investments. 

Benefits of the Move to Mastercard

The increased usage of Mastercard cards is expected to boost its net revenues derived from its payment network by charging fees to customers based on the gross dollar volume of the cards. There have been 3.4 billion Mastercard and Maestro cards issued across the globe as of Jun 30, 2024.

The latest move also forms part of Mastercard's broader strategy to simplify public transport payments globally, following successful implementations in cities like London, Sydney and Singapore. The introduction of contactless payments on the MTR is expected to set a precedent for similar adaptations in other locations.

Also, the idea of introducing the recent facility on one of Hong Kong’s most extensive public transport networks, MTR, which dominated just more than half of Hong Kong's franchised public transport market in 2023, seems to be time opportune move on the part of Mastercard. 

MA’s Price Performance

Shares of Mastercard have gained 14.5% in the past year compared with the industry's 14.4% growth.

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Zacks Rank & Key Picks

MA currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Business Services space are Trane Technologies plc TT, ICF International, Inc. ICFI and Parsons Corporation PSN. While Trane Technologies sports a Zacks Rank #1 (Strong Buy), ICF International and Parsons carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The bottom line of Trane Technologies outpaced estimates in each of the last four quarters, the average surprise being 8.05%. The Zacks Consensus Estimate for TT’s 2024 earnings indicates an improvement of 19.7% from the year-ago reported figure. The same for revenues implies growth of 10.6% from the year-ago reported number. The consensus mark for TT’s earnings has moved 0.6% north in the past seven days. 

ICF International’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 11.73%. The Zacks Consensus Estimate for ICFI’s 2024 earnings indicates an improvement of 8% from the year-ago reported figure. The same for revenues implies growth of 5% from the year-ago reported number. The consensus mark for ICFI’s earnings has moved 3.4% north in the past 30 days.

The bottom line of Parsons outpaced estimates in each of the last four quarters, the average surprise being 16.17%. The Zacks Consensus Estimate for PSN’s 2024 earnings indicates an improvement of 28.8% from the year-ago reported figure. The same for revenues implies growth of 19.6% from the year-ago actual. The consensus mark for PSN’s earnings has moved 6.8% north in the past 30 days.

Shares of Trane Technologies, ICF International and Parsons have gained 72.3%, 22.4% and 65.4%, respectively, in the past year.

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