Mastercard Incorporated MA recently announced the launch of Smart Subscriptions, which aims to help financial institutions better serve their customers, who are demanding a simple subscription management tool. Smart Subscriptions is an open banking management solution leveraging MA’s Subscription Control Solution launched in 2023. This new solution will provide management solutions coupled with spend analysis, categorization of expenses and customized offers all in one single place.

This move bodes well for Mastercard as it will enhance its offerings on the Data & Services front. Moreover, as customized offers are provided to customers, they are likely to spend more, thereby increasing the number of transactions processed and enhancing its top line. Financial institutions can add this tool to their customer banking apps, allowing customers to pause, cancel or continue their subscriptions.

Enhanced offerings for financial institutions will help with client retention for Mastercard and bring more engagement in their customer banking applications. Financial Institutions will also benefit from lower chargebacks and improved loyalty from customers. Customers stand to benefit from greater transparency into their financial health and access to customized offers and insights.

Per a Mastercard survey, 73% of customers showed interest in a tool that would aid in identifying, tracking, canceling or renewing subscriptions. The survey also highlights that 60% of customers mentioned that they would trust their bank to provide such a tool. Smart Subscriptions connects several accounts into one central hub, leveraging MA’s open banking technology. The new subscription management solution is configured so that banks will be able to implement it with a low-lift, single API.

Shares of Mastercard have gained 34% in the past year compared with the industry’s 26.2% growth. MA currently carries a Zacks Rank #3 (Hold).

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the same space are Envestnet ENV, Fidelity National Information Services FIS and International Money Express IMXI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Envestnet delivered a trailing four-quarter average earnings surprise of 7.7%. The stock has risen 11.5% year to date. The Zacks Consensus Estimate for ENV’s 2024 and 2025 earnings implies growth of 20.8% and 18.1%, respectively, from the year-ago figures.