New innovation lab expected to expand digital financial services in East Africa
People queue in a banking hall. The lab will generate financial inclusion solutions. FILE PHOTO
What you need to know:
This initiative is aimed at bringing the benefits and security of electronic payments across Africa and around the globe
MasterCard has unveiled 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.”
This initiative is aimed at bringing the benefits and security of electronic payments across Africa and around the globe.
The grant
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 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.
