Payment Facilitators “Central” to Mastercard’s Ambitious New Financial Inclusion Plans

Mastercard recently announced that it is extending its massive financial inclusion initiative, committing to bring 1 billion people and 50 million micro and small businesses into the digital financial system in the next five years.

These plans represent renewed opportunity for payment facilitators.

Mastercard has previously acknowledged the specific role that payment facilitators play in its financial inclusion efforts by helping remove barriers to payments acceptance for small and micromerchants.

Enabling payments acceptance for smaller merchants has previously been difficult to do through traditional channels, in no small part because it is expensive for banks to onboard smaller merchants, according to Todd Ablowitz, co-founder and co-CEO of Infinicept.

“Payment facilitators are the entities delivering innovative and creative solutions to more quickly and easily onboard small and micromerchants in a compliant way. They are also able to provide localized solutions and customer service. PFs exist to solve these sorts of problems,” he said.

Rory MacFarquhar, senior vice president, International Institutions Engagement, for Mastercard, agreed that PFs are a significant player in its effort to enable broader access.

“When Mastercard decided to enable 50 million micro- and small merchants to accept electronic payments by 2025, we understood that many of our traditional bank partners on the acquiring side were not well-positioned to reach this segment.  Many acquiring banks see micro and small merchants as too difficult to locate and too expensive to onboard, given the relatively modest payment volumes they handle. So payment facilitators, alongside fintechs and microfinance institutions, are central to our strategy for reaching small shopkeepers,” he said.

“That’s why we have been collaborating with partners like Infinicept to drive the PF model in markets around the world, and why we are working with institutions like the International Finance Corporation and European Bank for Reconstruction and Development to develop mechanisms to support and expand the PF ecosystem. During the current pandemic, we believe that our efforts to give individuals and merchants access to online and contactless means of payment are all the more urgent.”

Mastercard also noted in its announcement that the COVID-19 crisis has highlighted the need to bring previously excluded people into the fold.

“If we’re going to recover in any sort of long-term, sustainable way, we have to make sure that everyone is included. Getting people access to the digital economy is a critical part of that,” said Ajay Banga, Mastercard CEO.

“This is so much more than philanthropy. This is an opportunity to develop commercially-sustainable and scalable social impact with government and private sector partners—and to do it in a way that helps society-at-large thrive.”

The card network said in March that it was on track to fulfill its previous goal of bringing 500 million people into the digital economy by the end of this year.