Verizon (VZ) Business and Mastercard (MA) are teaming up to bring 5G connectivity to the payment industry. The two have forged a strategic partnership to drive transformational solutions for the payment and e-commerce industry. The ultimate goal is to develop scalable solutions that create new experiences for people and businesses.
Additionally, they plan to collaborate in unlocking Internet of Things (IoT) sensor connectivity to power fintech and banking industries. Verizon Business and Mastercard also plan to make it easy for smartphones and connected devices to accept payments, thus allowing small businesses to benefit from hyper-automated and immersive commerce experiences.
Under the strategic partnership, Verizon’s 5G network and Mobile Edge computing will be integrated with Mastercard’s retail technology. Part of the plan is to reduce hardware requirements to enhance checkout in stores. (See Verizon stock charts on TipRanks)
The two companies are also working together to create new ways for people to consume physical and digital goods. Consequently, they are to come up with a digitally motivated network that enhances personalized consumer experiences.
Verizon will also leverage Mastercard’s Bill Pay Exchange to enable real-time communication and connection between consumers and billers. The result should be streamlined bills paid through digital banking channels.
“Through this collaboration, Mastercard and Verizon’s platforms, which connect billions of consumers, businesses, banks and governments around the world, will be a force in driving transformational change,” said Mastercard North America President Linda Kirkpatrick.
Last month, Redburn analyst Stephen Malcolm reiterated a Sell rating on Verizon with a $50 price target, implying 10.86% downside potential to current levels. According to the analyst, the company could disappoint on the revenue front.
Malcolm stated, “Verizon has an enviable track record for a scale telecom incumbent. But as an equity, it faces likely revenue disappointment versus over-bullish guidance, rising capital requirements and falling ROCE. With only a 5% true cash yield, there is insufficient room for error.”
Consensus among analysts is a Hold based on 2 Buys, 8 Holds, and 1 Sell. The average Verizon price target of $60.11 implies 7.17% upside potential to current levels.
VZ scores a 7 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.
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