PURCHASE, NY, United States, 3rd December 2014, /African Media Agency (AMA)/- 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 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 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.
Distributed by African Media Agency (AMA) on behalf of MasterCard Worldwide.