Mastercard announced on Thursday an alliance with five leading financial services and technology companies in Latin America to accelerate digital and financial inclusion in a region where almost half of the adult population is unbanked.
“It is an unprecedented private sector agreement,” Kiki del Valle, Senior Vice President, Digital Partnerships, Mastercard Latin America and Caribbean, told Efe in reference to the “Tech for Good Partnership” alliance stemming from the company’s long-standing commitment to financial inclusion.
Del Valle said the multinational is guided by its principle that “doing good has positive results for business,” and added that she believed financial inclusion benefits society, as it strengthens the formal economy and creates job opportunities.
“Technology has the power to change the reality of millions of people and companies that are not prepared to face current challenges,” said Carlo Enrico, president of Mastercard Latin America and the Caribbean.
Enrico stressed the importance of uniting “the best minds, resources and efforts with a singular focus: to build an inclusive economy in the region. This can be a game changer for many.”
Mastercard sought this joint effort with Bancolombia, Banco Galicia and Citibanamex, and the fintech companies Mercado Libre and PayPal, aware that the private sector needs to and can do more to drive innovation for those outside the financial system.
They will pool their technology and knowledge so that no one is left behind in the digital economy, said Del Valle.
It also frees thousands of people from having to rely on non-formal moneylenders and remittance services, she added.
According to data from 2017, 45% of the Latin American adult population, which is equivalent to 200 or 220 million people, did not have bank accounts.
Only Africa has a lower bankarization rate.
AN ALLIANCE FOR GOOD
Although it has its own independent entity, the “Tech for Good Partnership” association is going to be “key” for Mastercard to achieve its goal of having incorporated one billion people into the financial world by 2025.
Half of that objective has already been met. Between 2015 and the beginning of 2020, it contributed to the financial inclusion of 500 million people around the world.
Mastercard also aims to incorporate 50 million micro and small businesses into the digital economy by 2025 and as part of that effort, it will provide 25 million women entrepreneurs with solutions to help their businesses grow.
Members of the “Tech for Good Partnership” are committed to using their resources, assets, and expertise to prioritize financial and digital inclusion efforts in the wake of COVID-19.
In the first phase, they will focus on developing concrete initiatives in specific markets to expand basic financial services such as access to credit, financial aid, and educational tools and resources for the millions of Latin Americans who are currently vulnerable.
Over time they will share best practices and the results of the initiative with the financial services industry more widely for the betterment of the ecosystem through virtual events, white papers and publications, among others.
The regional senior vice president of Digital Partnerships points out that new products such as banking applications and digital wallets may emerge from this alliance.
ACCESS, USE AND SECURITY
In Del Valle’s opinion, the most important thing is that this partnership goes “beyond” achieving that a greater number of people in Latin America have access to the financial system, noting that the “use” that both people and businesses can make of it to ensure a “successful future” and “security” in operations.
The technological boom seen in Latin America in recent years has become an enabler for many to have access to goods and services during this time of social distancing from COVID-19, but many micro-businesses still lack the ability to sell their products online.
The association will work on ways to develop digital resilience programs for the millions of micro and small businesses that do not have the ability to resume operations.
According to a Mastercard research, e-commerce has grown exponentially in Latin America. Some 54% of Colombians, 52% of Brazilians and 46% of Mexicans have indicated that they intend to buy more online.
The Mastercard Center for Inclusive Growth will also support financial inclusion efforts in Latin America carried out by members of the “Tech for Good Partnership.” EFE