Corpay Interests Align Well With Mastercard: Analyst

Corpay Inc.'s CPAY stock slipped after the company announced a strategic partnership with Mastercard Inc. MA in cross-border payments.

The partnership "validates the hidden value of Corpay's B2B cross-border payments unit," according to JPMorgan.

The Partnership: Analyst Tien-tsin Huang said that the agreement has Mastercard taking an investment stake of $300 million in Corpay's cross-border business, which is an "important growth area in payments."

The Corpay Thesis: The deal will allow Mastercard's non-tier 1 banks to better compete with tier 1 banks by enabling them to provide cross-border payments to financial institutions (FIs), Huang said in the note.

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This would accelerate Corpay's cross-border revenues from the underserved FI segment, he added.

"Also, CPAY will exclusively issue Mastercard virtual cards, while CPAY will re-market Mastercard Move to its current/ prospective SME clients," the analyst wrote. The deal seems like it aligns the interests of both companies to penetrate the cross-border and business-to-business (B2B) markets, he further stated.

CPAY Price Action: Shares of Corpay had declined by 1.49% to $319.43 at the time of publication on Wednesday.

Read More:

• Mastercard Bets On Cross-Border Payments With $300 Million Corpay Deal

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