The Mastercard stock price retreated slightly on Tuesday even after the company made foray’s into the fast-growing buy now, pay later (BNPL) industry. The stock declined to $355, bringing the company’s marke capitalization to more than $253 billion.
Mastercard BNPL plans
Mastercard is one of the biggest fintech companies in the world. The company provides multiple services to millions of customers globally. Its card business is asset-light and high margin one because the company just provides banks with the technology. It then makes its money when users transact using its cards.
Still, Mastercard’s credit card business is being disrupted by the fast-growing buy now pay later companies like Affirm, AfterPay, and Zip. These companies offer their customers a way to shop and pay in instalments without incurring any interest. They then make money by taking a small commission from the sellers.
In a statement on Tuesday, Mastercard announced that it will introduce BNPL services in the UK, US, and Australian markets. The service will be known as Mastercard Installments and it will enable banks, lenders, fintech, and wallets the ability to offer these services. It will work with companies like SoFi, Barclays, Fifth Third, and Synchrony to offer these services.
Mastercard will leverage its Finicity product to offer the service. Finicity is an API-based company that Mastercard acquired in 2020. The product helps companies connect their customers banking details to mobile applications. In a statement, the company’s Chief Product Officer said:
“Mastercard Installments has been built on our guiding principles to protect consumers and enable choice without sacrificing trust and security. It is a digital-focused way to pay today and tomorrow.”
Meanwhile, Mastercard is also embracing for disruption brought by the Bitcoin and other cryptocurrencies. The firm acquired CipherTrace early this month. CipherTrace provides intelligence products by tracking more than 900 cryptovcurrencies.
Mastercard stock price forecast
The daily chart shows that the Mastercard stock price has been under pressure in the past few weeks. The stock formed a double-top pattern at $395 between April and August. It then moved slightly below the neckline of the double-top pattern at $354. Now, it has retested this level, in what looks like a break and retest approach.
Therefore, while the overall outlook for the stock is bullish, there is a possibility that it will remain under pressure as bears target the next key support at $300, which is along the 50% retracement level.
