2.5 billion adults around the world 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. This is despite digital innovations around financial services.
Mastercard has therefore launched 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. MasterCard is looking to create and scale financial services that open up a world of inclusion and help people build better, brighter futures.
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. Gates foundation in collaboration with the private sector, NGOs, governments and others will 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.
The new lab will be part of MasterCard Labs, MasterCard’s global Research 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 P2P 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 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.