E-Financial
MasterCard Lists Expectations from Digital Financial Services Lab
MasterCard has expressed its expectations Digital Financial Services lab recently launched in East Africa with funding from the Bill & Melinda Gates Foundation.
In a telephone chat with Nigeria CommunicationsWeek, Daniel Lanre Monehin, division president, Sub-Saharan Africa at MasterCard, said although the lab comes up in East Africa, MasterCard will ensure innovations and applications developed therein be used to leapfrog financial inclusion in the African Continent.
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.
MasterCard is notable as a leading global payments solutions company that provides a family of well-known, widely-accepted payment card brands including MasterCard, Maestro and Cirrus and serves consumers, financial institutions, and businesses in over 210 countries and territories worldwide.
Monehin said that the new initiative seeking to impact more than 100 million people even globally, by developing practical and cost-effective financial tools that expand access and help build stable futures over the long term.
Specifically, the Divisional President said that Africans fates are now in their hands, hence MasterCard is interested in tackling issues related to biometrics, pensions, e-payment and cashless economy policies, and bring the financially excluded into the system.
He reiterated that 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.
“Although the lad is launched in East Africa, but the innovations coming from there will not only be implementable in East Africa, or Africa, rather MasterCard is interested in addressing several critical financial inclusion challenges. Every economy has its peculiar challenges; what we want is for Africans to develop applications that will serve the people and bring the financially excluded on-board,” Monehin said.
While expressing confidence on the viability of the project, he cited the South African Social Security Agency (SASSA), one of the world’s first debit card-based payment systems for welfare benefits and social security, which has saved the country $350million over a five-year period.
He said, “MasterCard is passionate about the new innovation and we draw our inspiration, again, from the SASSA project in South Africa where the debit card issued to the citizens serves multiple purposes. Today, South African uses the card to disburse government pension, disability, and public assistance payments because of its biometric-debit card composition.
“Unlike normal debit cards, the South African cards require users to have their fingerprints and voices digitally analyzed by computers. In effect, they’re the next generation of the EBT cards commonly used for food stamps in the United States”.
In Nigeria, he said, MasterCard is passionately involved in the management of payments account specific information under the ongoing national identity management scheme, and hopes “the Card when activated will help in bring about 70% of the financially excluded Nigerians in the banking system; deepen e-payment and help in the disbursement of pension”.
Expatiating on the payments technology deployed by Mastercard under the program, Monehin said the eID card is a chip and pin card certified according to the EuroPay, Mastercard and Visa (EMV) standard for globally interoperable, secure payments, which is mandated by the Federal Government, and it is approved and licenced by the CBN.
Thus, MasterCard’s vision for setting up the digital financial service lab was geared towards addressing issues where, “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.
He added that the investment made by the Gates Foundation, coupled with MasterCard strong innovation processes, they will create and scale financial services that open up a world of inclusion and help people build better, brighter futures.
Daniel who is primarily focused on establishing the MasterCard brand presence, driving card issuance, increasing acceptance, deploying innovative solutions and partnering with market regulators, noted that 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.
Titan Trust Bank has selected Oracle FSS for its core and digital banking technology, it is understood.
The start-up bank recently obtained its license by the Central Bank of Nigeria (CBN).
It’s understood that Temenos and Infosys also competed for the deal.
The shortlist came down to the two most widely installed international core systems in Nigeria, Infosys’ Finacle and Oracle FSS’s Flexcube.
The Nigerian banking sector has seen a great deal of upheaval over the years, with many mergers, start-ups and closures. Flexcube is a well respected name since the late 1990s (the pioneer was Access Bank, now one of the country’s top five banks) and has been a commonly selected platform since then.
The new bank is believed to be one of five to have gained regulatory approval of late (Globus Bank is another).
Local media sources say the new licences stem from the Central Bank’s desire to attract new investments into the sector and better serve the country’s 50 million+ unbanked and under-banked citizens.
Titan Bank is said to be headed by a former executive director of Heritage Bank (which is a Finacle user).
Oracle FSS did not respond to request for comment.
International Monetary Fund (IMF), has appointed Tony Elumelu, Nigerian billionaire and group chairman of Heirs Holdings, owners of United Bank of Africa, to its advisory council on entrepreneurship and growth, convened by Kristalina Georgieva, the fund managing director.
The announcement was disclosed in a statement on Friday.
According to the statement, the IMF advisory council comprises global business leaders, policymakers, and academics dedicated to identifying and addressing regulatory barriers to entrepreneurship.
The IMF said Elumelu will be instrumental in ensuring that Africa’s entrepreneurship is central in policy making.
“Elumelu, Africa’s leading advocate of entrepreneurship and whose Foundation has funded, mentored, and trained over 25,000 African entrepreneurs since 2015, champions entrepreneurship as the engine for the economic transformation of Africa,” the statement reads.
“A self-made entrepreneur, Elumelu’s embracing of entrepreneurship is fundamental to his concept of Africapitalism, his belief that Africa’s private sector can and must play a leading role in the continent’s development, making long-term investments that deliver social and economic value.
“Elumelu will be instrumental in ensuring that Africa’s entrepreneurial potential is central to global economic policy making.”
Speaking at the inaugural meeting of the advisory council on March 26, Georgieva said the appointees would share their experiences on how macroeconomic and financial policies “can provide a supportive environment for innovation, entrepreneurship, and productivity — key ingredients for a thriving private sector and strong economic growth”.
Africa’s Micro, Small, and Medium Enterprises, fintech industry, scaling remittances, and cross-border payments will be the driving forces behind the continent’s digital ballooning payments system, which is estimated to reach $1.5 trillion by 2030.
This is according to a MasterCard-commissioned study by Genesis Analytics, which states that the digital payments economy is growing faster on the continent.
This comes as the World Bank says Sub-Saharan Africa has shown significant growth in financial inclusion over the past decade, much of it driven by mobile money account adoption.
Dimitrios Dosis, president, Eastern Europe, Middle East and Africa at MasterCard, comments: “Africa is filled with immense possibilities, and its people have the potential to shape the global economy in the decades ahead.
“MasterCard remains deeply committed to driving digital transformation across the continent, working closely with entrepreneurs, merchants, banks, start-ups, telcos, and governments. By increasing our investments, expanding innovation, and fostering inclusion, we are helping build a more connected and accessible digital future.”
The payment technology company went on to say as a longstanding technology partner to Africa, its continues to strengthen its commitment to the continent’s digital growth through strategic investments, public-private partnerships, and innovation initiatives that drive financial health and economic growth.
In addition, it says trends in Africa signal a strong shift towards digital transactions, with businesses and consumers increasingly embracing contactless solutions, further accelerating economic participation and financial accessibility across the region.
“For over five decades, MasterCard has worked alongside African governments, businesses, and communities to advance financial inclusion and economic development.
“With Africa projected to host nine of the world’s 20 fastest-growing economies, we are focused on leveraging our expertise and a technology to support the continent’s continued digital transformation.
“Our investments today will help build a more resilient economy for the future,” says Mark Elliott, division president, Africa, MasterCard
By fostering collaboration with key stakeholders, MasterCard says it aims to enhance digital connectivity, expand economic opportunities, and enable millions of people and businesses to thrive in the digital economy.
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