Mastercard to Snap Up Aiia; Street Says Buy

Financial services major Mastercard, Inc. (MA) recently announced that it has entered into an agreement to acquire Aiia, a European open banking technology provider. The terms of the deal, which is likely to close by the end of this year, have not been disclosed.

Following the news, shares of the company gained 1.3% on Tuesday. Moreover, it added to its gains slightly to close at $345.34 in extended trade.

Aiia provides a direct connection to banks through a single API, enabling its customers to strengthen its digital capabilities. With this buyout, Mastercard’s presence in Europe would be solidified. Further, the acquisition will give Mastercard access to Aiia’s expertise in data privacy, security and quality. This coupled with Mastercard’s existing distribution channels, technology and data practices would allow the company to serve its customers more efficiently.

The Chief Product Officer of Mastercard, Craig Vosburg, said, “The value of open banking comes through empowering consumers and businesses to use their own data to obtain financial services solutions simply, securely and quickly. The addition of Aiia anchors our European open banking efforts and allows us to continue to meet our customers where they are” (See Mastercard stock chart on TipRanks)

Recently, J.P. Morgan analyst Tien Tsin Huang reiterated a Buy rating on the stock. The analyst, however, raised the price target from $427 to $430, which implies upside potential of 24.7% from current levels.

Consensus among analysts is a Strong Buy based on 14 Buys and 1 Holds. The average Mastercard price target of $441.27 implies upside potential of 28% from current levels.

Mastercard scores a 6 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market expectations. Shares have gained 4.5% over the past year.