Why Do Merchants Trust Mastercard in a Risky Digital World?

Mastercard Incorporated MA continues to gain the trust of merchants in today’s digital world, where payment fraud and cyber threats are on the rise. The company’s proactive security infrastructure and established industry reputation keep it at the top of merchant preference, which supports its volume growth. MA has invested heavily in cybersecurity.

The company has rolled out AI-driven fraud detection tools, along with biometric authentication and tokenization technology that swaps out card details for unique identifiers, significantly lowering the risk of theft. Its exclusive Cyber Secure tool offers real-time risk assessments, enabling businesses to identify and tackle vulnerabilities before they can be taken advantage of. MA also launched Mastercard Agent Pay, which combines its agentic tokens with cybersecurity, fraud and franchise regulations. These will assist Microsoft and other partners in enabling safe, easy and programmable transactions across AI platforms.

In addition to technology, MA is building trust via strategic partnerships and global compliance. The company collaborates closely with merchants and regulators to keep up with changing data privacy standards like GDPR and PCI DSS. Also, its acquisition of RiskRecon, a cybersecurity company, has boosted its ability to keep an eye on third-party risks, something that can be challenging for SMEs to handle on their own. MA also emphasizes education and transparency. With initiatives like the Trust Center and global fraud insights, it helps businesses stay updated.

As e-commerce keeps expanding and digital fraud gets trickier, Mastercard’s multi-layered defense model, real-time intelligence and collaborative ecosystem provide merchants with the confidence to concentrate on growth without worrying about threats.

How Are Competitors Faring?

Some of MA’s competitors adopting AI to improve operations include Visa Inc. V and PayPal Holdings, Inc. PYPL.

Visa is also making significant strides in cybersecurity. Visa poured over $10 billion over the past five years into AI and fraud prevention technologies, allowing their systems to sift through millions of transactions in real time to spot any unusual activity.

PayPal is actively using AI to improve its platform in a number of ways, from streamlining checkout procedures to giving developers more flexible workflows. These AI-powered solutions demonstrate PayPal's dedication to increasing productivity, customizing communications and strengthening security for both customers and companies.

Mastercard’s Price Performance, Valuation & Estimates

In the year-to-date period, MA’s shares have gained 4.3% compared with the industry’s rise of 2.4%.

From a valuation standpoint, MA trades at a forward price-to-earnings ratio of 31.59, above the industry average of 21.85. MA carries a Value Score of D.

The Zacks Consensus Estimate for Mastercard’s 2025 earnings implies 9.6% growth from the year-ago period.

Mastercard currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This article originally published on Zacks Investment Research (zacks.com).

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