Strategic Alliances and Acquisitions

The joint venture between Apple Pay and Master Card is likely to evolve into an equity
alliance. Two possible scenarios might arise: one company acquires equity or shares in another
firm (partial acquisition or minority stakes), or the two companies reach a mutual agreement to
buy each other’s equity (cross-equity transaction or shareholding). These two scenarios point to
the possibility of the two businesses sharing some of their resources like operations,
technologies, and finances partially or wholly (Das, 2012). MasterCard is an international
financial service provider that allows users to execute secure mobile or online transactions using
their cards. MasterCard has previously collaborated with Apple to provide a safe and seamless
payment experience, allowing consumers to make payments with a MasterCard using Apple
Watch and iPhone (MasterCard, 2014).
The nature of synergy between Apple Pay and Master card will be reciprocal, implying
that the two entities will work closely together to execute tasks through an interactive process of
knowledge and resource sharing. Apple pay enables mobile payment transfers via a seamless and
secure purchase platform. Collaborating with MasterCard means that Apple clients will make
mobile payments with MasterCard through an Apple Pay application installed in iPhones, Apple
Watch, and other Apple-enabled devices. Therefore, all transactions taking place through
MasterCard will notify Apple Pay. This is where the integration and sharing of technologies,
resources, and data will occur between the two entities. A key focus will be combining the
‘separate’ resources and technologies owned by the two firms to create one seamless and secure
platform (Das, 2012).
In a complete acquisition process, there is a need to focus on the hard and soft resources
present in Apple Pay and MasterCard. Both items are separate software products of their parent

STRATEGIC ALLIANCES AND ACQUISITIONS 3
companies, including Apple Inc. and Master Card. Since the focus is on combining the soft
resources, the best transition will be an equity alliance. If there were a need to connect the
complex resources, then a complete acquisition would be more suitable. However, that is not the
case between Apple Pay and Master Card, making sharing equity the most effective and
efficient.

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References
Das, T. K. (2012). Strategic alliances for value creation. IAP.
MasterCard. (2014, Sep. 9). Press releases: MasterCard works with Apple to integrate Apple
Pay. https://newsroom.mastercard.com/press-releases/mastercard-works-apple-integrate-
apple-pay/