“Apple is not a fruit, Amazon is not a river, and Mastercard is not a credit card company,” Michael Froman tells Arabian Business during an interview as the company announced its partnership with Gavi, the Vaccine Alliance, to ensure more children from the world’s poorest countries are able to benefit from life-saving immunisation programmes.
The vice chairman and president of Strategic Growth at Mastercard stresses this because the company, which operates the world’s fastest payments processing network, has been helping level the playing field to make the world more financially and digitally inclusive for nearly a decade.
From offering digital platforms that empower farmers to buy, sell and receive payments for agricultural goods via their feature phones, to replacing paper voucher systems in humanitarian crises with preloaded digital cards for food and supplies, to offering tools to help people manage income streams and plan for their future – the company has made a global commitment to connect 500 million people to formal financial services through the use of public-private partnerships with governments, the private sector and non-governmental organisations.
Mastercard’s latest initiative with Gavi enables ministries of health and authorised health workers in Gavi-supported countries across Africa, Asia and Latin America to provide a card with a digital immunisation record to each participating child’s caregiver. In many developing nations, common barriers include a lack of information about a child’s immunisation record and limited means by which to remind caregivers about follow-ups.
With two billion adults worldwide living without access to mainstream financial tools and services, Mastercard sees an urgent need to speed up the creation of commercially viable solutions for the segment.
“This whole area of the base of the pyramid is of great interest to us,” Froman says. Although he calls it the “most challenging new customer segment”, the executive says making meaningful impact is also part of its long-term growth strategy because for markets to depend on just philanthropy, corporate social responsibility or foreign aid isn’t scalable.
Being financially inclusive creates an environment in which the company will succeed, Froman adds, although the move isn’t about maximising profit in the short-to-medium term. Long term, however, the inclusiveness is expected to drive creation of new merchant networks.
This would help women who are now getting paid in cash and have to fight hard to keep that cash safe
He explains: “We thrive when economies thrive. Economies are healthier when the growth is inclusive. (When) you bring more people into the system, you’re going to have more stable, more inclusive economies. We’re also on this journey, in part, to demonstrate that we can have commercially sustainable social impact.”
Mastercard is also currently working with some companies in Africa to digitalise the payroll of low-wage workers in labour intensive industries, a majority of which are women.
“This would help women who are now getting paid in cash and have to fight hard to keep that cash safe,” Froman says.
Mastercard’s well-thought out initiatives are no surprise as its leader, President and CEO Ajay Banga has been a vocal proponent of business as a force for good.
Froman adds that Banga, who was honoured with the United Nations World Food Programme ‘Hunger Hero Award’ at the World Economic Forum in Davos last year, is beloved for inspiring his teams with the story of a woman he met in Soweto, South Africa, after introducing the South African Social Security Agency Debit Mastercard. “(She) used to get robbed all the time when she got her money in cash from the government and now feels that she’s getting paid safely and securely,” Froman says.
“We have a phrase we talk a lot about inside our company about doing well by doing good. When the various parts come together, you can really see how somebody’s life at the base of the pyramid is fundamentally transformed, and that’s what this is really about.”
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