By Andrei Skvarsky.
MasterCard has launched a lab to develop cost-effective digital financial services for poorer population strata in East Africa.
The project is part of MasterCard Labs for Financial Inclusion, an initiative launched by the card payment services company in a bid to develop cost-effective financial tools for more than 100 million people globally.
“Trapped in a cash economy,” millions of people in East Africa “lack the financial services to guard against risk, invest in their future and build better lives”, MasterCard said in a statement.
The East African project will be funded with a three-year $11m grant 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”, MasterCard said.
There are still 2.5bn adults around the world who are excluded from formal financial services and forced to rely on cash, the company said.
The East African lab will be part of MasterCard Labs, a global research and development division that has created hundreds of prototypes in recent years in a variety of areas from payment acceptance to authentication to person-to-person payments.
“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 statement said.
Products and services developed at under the MasterCard Labs for Financial Inclusion initiative would “leverage existing and new infrastructures, including those that are not specific to MasterCard”, and would “make use of standards ensuring maximum flexibility to empower local financial service providers for the benefit of poor people in the developing world”, it said.
This initiative is one of several collaborations MasterCard has launched with public and private sector entities for building out electronic payment systems across Africa and worldwide, MasterCard said.
The agreement between MasterCard and the Gates Foundation on which the initiative is based reserves an additional $8m to facilitate the commercialisation of new ideas.
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