Ajay Banga, President & CEO xp |
Across
East Africa, millions of people living in or near poverty struggle to pay for
their children’s school fees or necessary health care treatment when unforeseen
events occur. Trapped in a cash economy, they lack the financial services
to guard against risk, invest in their future and build better lives.
Today,
MasterCard announced the launch of MasterCard
Labs for Financial Inclusion, a new initiative seeking to impact more
than 100 million people globally by developing practical and cost-effective
financial tools that expand access and help build stable futures over the long
term.
Through
an $11 million grant over three years from the Bill & Melinda Gates
Foundation, the lab will generate new ideas with local entrepreneurs,
governments and other stakeholders across East Africa, and rapidly move from
concept to reality.
“Too
many people lack access to the most basic financial services, leaving them
trapped in a cash economy that imposes greater risks and costs on those least
able to afford them,” said Ajay Banga,
president and CEO at MasterCard. “Through the investment made by
the Gates Foundation, coupled with our strong innovation processes, MasterCard
will create and scale financial services that open up a world of inclusion and
help people build better, brighter futures.”
The
Gates Foundation works with the private sector, NGOs, governments and others to
direct resources and expertise to address critical challenges that can’t be
solved by market forces alone. With this grant, the foundation seeks to extend
financial services to those whose economic lives are inhibited and eclipsed by
a combination of local factors and institution-wide exclusion. The grant
enables MasterCard to reach into these new markets that may otherwise be
commercially unviable.
Globally,
digital payment innovations let more people take advantage
of formal financial services. These tools are simple to use, efficient
and have the potential to dramatically reduce costs.
Despite
these innovations, there are still 2.5 billion adults around the world who are
excluded from the formal financial system. These people lack access to basic
financial services and are forced to rely on cash, which creates instability
and significant risks.
The
new lab will be part of MasterCard Labs, MasterCard’s global Research and
Development division that focuses on the evolution of technological and
consumer trends and has created hundreds of prototypes over the last several
years in a variety of areas from payment acceptance to authentication to
Person-to-Person payments. Leveraging the proven innovation process, the lab
will generate financial inclusion solutions and fast-track the best ideas from
concept through prototype, pilot and into commercialization faster than ever
before.
The
foundation will grant MasterCard $11 million over three years, to use for
research and development—with MasterCard funding the lab going forward. The
agreement reserves an additional $8 million for ideas that evolve to the
incubation stage, to give each startup the best possible chance of reaching
commercialization at scale and becoming a vital part of a new economy.
MasterCard will manage the MasterCard Labs for Financial Inclusion in a manner
that ensures global access. This ensures that the results stemming from the lab
have true benefits for poor people with the widest possible application and the
capacity to extend solutions regionally and possibly globally.
The
work done at the MasterCard Labs for Financial Inclusion will lead to new
products and services for poor people that leverage existing and new
infrastructures, including those that are not specific to MasterCard. The
lessons from the MasterCard Labs for Financial Inclusion will be distributed
for the public good, and all products and services coming out of the Lab will
make use of standards ensuring maximum flexibility to empower local financial
service providers for the benefit of poor people in the developing world.
This
initiative is one of several broad-based collaborations MasterCard has launched
with public and private sector entities that are quickly bringing the benefits
and security of electronic payments across Africa and around the globe.
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