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TheStreet Open House

Technology And Partnership Approach Driving MasterCard Financial Inclusion In 2014

MasterCard’s technology combined with increased engagement of governments is helping drive greater expansion of financial inclusion. Public-private partnerships, such as the social security program in Pakistan MasterCard announced last week, offer citizens new opportunities to join the financial mainstream.

Around the world, innovations such as prepaid and mobile payments combined with biometrics are enabling more people to take advantage of formal financial services. This is especially apparent in Africa where MasterCard was recently recognized by The African Banker for its work extending financial inclusion across the continent. MasterCard’s broad-based collaboration with public and private sector entities is quickly bringing the benefits and security of electronic payments to the continent’s largest economies, where financial exclusion is still prevalent.

  • MasterCard’s work with the South African Social Security Agency has helped showcase the impact of delivering government funds via electronic payments and encouraged other governments to explore these solutions.
  • In Nigeria, the government launched a national ID program that combines a biometric identification solution with a prepaid payment functionality powered by MasterCard and is the broadest financial inclusion initiative of its kind on the African continent.
  • In Egypt, MasterCard partnered with the National Bank of Egypt and Etisalat to unveil the first Arabic mobile money program that enables subscribers to transfer money via their phone.

Earlier this year, MasterCard president and CEO Ajay Banga set the tone on the private sector’s role to provide broader access to financial services for the 2.5 billion adults who lack a simple bank account. “While the risks of not addressing financial inclusion are profound, the benefits are undeniable,” said Banga. “If it’s done well, it can help grow an economy that’s more equitable, sustainable and inclusive.”

But, leading on financial inclusion isn’t new to MasterCard or limited to Africa. In fact, MasterCard has programs designed to bring financial access to over 350 million people around the world including:

  • In Brazil, MasterCard’s joint venture with Telefonica created Zuum, a mobile money solution to make deposits or transfers and pay bills easily and securely;
  • In Vietnam, a partnership with Viettel and Military Bank to develop a prepaid card linked to the Viettel BankPlus wallet;
  • In India, a collaboration with Beam launched a mobile companion prepaid card that allows mobile wallet consumers to transact at physical merchants, online and access ATMs;
  • In Turkey, together with the Turkish Government and DenizBank, MasterCard introduced a new Social Aid Card to bring innovation and efficiency to Turkey’s welfare service; and
  • In Canada, a collaboration with SelectCore and the City of Toronto launched the City Services Benefit Card, a prepaid card program enabling Toronto residents to instantly receive their Ontario Works benefits through an EMV chip and PIN prepaid MasterCard.

Throughout 2014, MasterCard has continued to lead efforts that expand financial inclusion:

  • Issuing new payroll card standards in the United States to help employees take full advantage of the benefits of having their paycheck electronically deposited;
  • Launching the MasterCard Center for Inclusive Growth to foster collaborative relationships between academia, governments, nonprofits, the social design community, and the private sector that advance research and investment in sustainable economic growth;
  • Partnering with the Inter-American Development Bank to promote economic inclusion in Latin America & the Caribbean;
  • Co-authoring “Banking a New Generation” with Child Youth Finance International to help financial institutions, NGOs and governments co-create appropriate and innovative banking and payment products for young people;
  • Leading conversations on Financial Inclusion with the World Economic Forum in Davos, Colombia, Nigeria and Philippines; at the China Development Forum; and with the World Bank;
  • Conducting the Road to Inclusion study in India, Indonesia, Vietnam, Philippines, Egypt, and Nigeria that challenges previously-held notions of the unbanked; and
  • Continuing to partner with the Better Than Cash Alliance, an organization that works with governments, the development community and the private sector to move towards electronic payments in emerging economies as a pathway to greater financial access.

“We must dispel the myths surrounding financial inclusion,” said Banga. “The 2.5 billion adults without access to financial services are disproportionately women and young people and include many who are employed or living in urban centers. And, there are 106 million unbanked or underbanked people in the United States, so clearly financial inclusion is needed in all markets, not just the developing world.”

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