MasterCard Inc. (MA) stock is trading at $104.20 per share, up $0.65 in the early morning session. MasterCard closed the day on Monday, 5 December at $103.55 per share, up 2.42% or $2.45. Part of the reason the stock price is surging is the announcement that MasterCard Send™ is now available. This money transfer service is operational with Wells Fargo & Company (WFC) and MasterCard (MA).

It allows for rapid processing of payments between Wells Fargo Merchant Services clients and Wells Fargo Treasury Management. The MasterCard Send™ API allows easy transfers of funds between financial institutions, businesses, governments, non-profits, and merchants. It is now possible to digitize check and cash payments for greater convenience. The growing need for rapid online money transfers is driving banks, credit card companies, and financial institutions towards innovative solutions. MasterCard Send™ is one such solution that is helping to drive up the share price

How Has MasterCard Stock Been Performing?

Over the past 4 financial quarters, MasterCard has performed above expectations. In all instances, a positive earnings surprise has been generated. If we turn our attention to Q4 2016, the earnings estimate is $0.86. This is a sharp downward revision from the Q3 2016 estimate of $0.98. At that time, the actual earnings came in at $1.08, besting estimates by a long margin.

The quarterly earnings surprise history for MasterCard has been bullish. For the fiscal quarter ending in September 2016, the consensus EPS was $0.98 and the actual earnings were $1.08. This generated a 10.2% earnings surprise. With the federal funds rate expected to rise by 25-basis points on Wednesday, 14 December 2016, we can expect MasterCard’s earnings to increase in coming quarters.

Guggenheim, Visa and MasterCard: Who Leads the Way?

In terms of financials, there has been strong revenue growth between 2013 and 2015. Revenues have increased from $8.31 billion to $9.67 billion, while earnings have risen from $3.12 billion to $3.81 billion. On a rating scale of 1.0 (strong buy) to 5.0 (sell), MasterCard is at a solid 2. The 1-year target price is $118.57 per share, $15 higher than the prevailing price.

A month ago, Guggenheim downgraded MasterCard from a buy to a neutral rating. Since then, the stock has depreciated by 2.57%. For the year to date, MasterCard is up 6.08%, and on the incline. MasterCard rival, Visa was upgraded by Guggenheim on Monday, 5 December 2016. This allowed Visa’s stock price to rise by 2.5%. However, when we take the year-to-date performance of Visa into account, it is down approximately 0.32%.

What Should We Expect with the Holiday Season Approaching?

It comes as no surprise that the holiday shopping season will have MasterCard clients swiping their cards en masse. According to the senior VP of market insights at MasterCard Inc., experiential spending has taken center stage this season. This includes airline, cruise ships, hotel, restaurants and like. Year on year spending has increased sharply per Quinlan stats, and there is stiff competition between online shopping giants like Amazon and traditional shopping outlets. MasterCard’s November spending rose by 4.4%.

Airline spend, lodging, and restaurants were particularly bullish in November and this trend is likely to continue in December. Credit card giants – MasterCard and Visa – are going to benefit from the Christmas shopping season in a big way. A major shift is taking place in the US retail sector where department stores are increasing their budgets to improve the customer experience. Companies like Walmart, Target, Costco and others are ramping up their in-store offers and enhancing the customer experience to bring people back into their stores. Given these short-term trends, we can expect MasterCard stock to rise moving forward.