CASH or Cashless? Mastercard would rather you choose the latter. That is why it operates the world’s second largest consumer payment system, boasting more than 2 billion credit and other payment cards in circulation in 25 million locations across 210 countries. Mastercard’s history began with United California Bank in 1966 when it traded under the name Interbank/Master Charge. The major reason for its founding was to compete with Bank of America’s BankAmericand, now known as Visa Inc.
Two years later, Master Charge was acquired by the California Bank Association. Ten years later, the now famous Mastercard brand was launched. Over the following years, numerous American banks would licence the card system from Bank of California. After a number of evolutions, over the course of many years, in 2006 the payment system underwent what seemed the last name change – Mastercard International – to suggest the global operational status it has since attained.
Driving the Mastercard operation in Nigeria and other English-speaking countries in West Africa is Omokehinde Adebanjo, who in this interview, shares her thought on the evolution of digital payments in Africa.
By Onome Amawhe
THE strategic objective of Mastercard is to get rid of cash. Why is it so important to move away from cash?
Cash remains the biggest barrier to financial inclusion in Africa, and fuels inefficiency, lack of transparency and thus weakens economies. People in Africa want to move beyond cash, they see the value of introducing safer and more convenient ways to pay for goods and services – benefiting all stakeholders in the ecosystem. Working alongside our partners in Nigeria, and across the continent, allows us the opportunity to positively impact the economy through the introduction of technology that meets the diverse needs of all citizens.
Digital payment solutions
Digital payment solutions, such as Masterpass QR (launched in Nigeria in September 2016), remittance solutions and other mobile-driven solutions are helping shift behaviour as people are seeing the benefit of going cashless. This roll-out of relevant technology solutions is in support of our global commitment to connect 500 million people by 2020, and digitally including 40 million merchants – driving our vision of a world beyond cash.
How has digital payments helped ease the demands of today’s consumer?
With the rapid progression of payment technologies, customer demands are increasing. Digital payments offer a range of benefits to consumers with convenience, speed and simplicity being top priorities. Digital payments further remove the risks associated with carrying cash, reducing the likelihood of corruption.
So, what is the positioning here – are your prepaid cards for unbanked or under-banked?
Our prepaid cards are, in fact, aimed at both the unbanked and under-banked. The card does not require the user to open a savings account or pass a credit check, with the only requirement is proof of identity and address. This makes it easier than ever for the unbanked to join the financial mainstream by using the card for the products and services they would have previously paid for in cash, therefore guaranteeing convenience and safety.
How do you differentiate yourself from competitors?
What makes Mastercard different is that we are driven by a vision of a World beyond Cash. This is the driving force behind our investment in infrastructure, partnerships and innovative technology on the continent. Unlike other players in the electronic payment space who simply exist to facilitate electronic payments, our aim is to create a financially inclusive Nigeria, African continent, and globe. We also open up opportunities for people, businesses and communities to be more connected and inclusive. Technology in Africa has presented an opportunity to drive inclusive growth amongst the unbanked and with financial inclusion – we are set to give basic human fairness and dignity to all.
What about customer acquisition? How do you effectively acquire your customers?
We do not ‘acquire’ customers but rather partner with key stakeholders such as financial institutions, merchants, governments and businesses. We value our partnerships with governments, central banks and financial stakeholders as it is through them that we are building robust electronic payment ecosystems that support Africa’s potential for economic transformation. We know that we cannot increase financial inclusion without public-private partnerships and the commitment of the larger ecosystem.
Could you provide an overview of your journey highlighting very current and future milestones?
The Mastercard core business objective is to apply digital payments technology and expertise in Africa to create sustainable, scalable solutions that will include millions of financially excluded or under banked Africans, developing ‘a world beyond cash’. The launch of Masterpass QR in partnership with Ecobank Group in Nigeria is just one example of how we are using technology to drive growth and inclusion. Additionally, a partnership with United Bank of Africa saw the Nigerian launch of the first merchant-focused UBA Masterpass QR Merchant App for Micro, Small and Medium Enterprises (MSMEs) in Africa. The UBA Masterpass QR Merchant App is set to change the payment landscape with the goal of benefiting micro merchants across Nigeria – the first market chosen to go live with the app. With both these solutions already benefitting Nigerians, we are working with many other partners to roll-out Masterpass QR in Nigeria to ensure a solid ecosystem is created to the benefit of merchants and consumers.
What is your view of the current “payments and transactions processing” market? Where do you see it evolving in the future?
The rise of digital payments and the global trend to move away from cash has meant the development of an increasingly competitivepayments sector. The mobile phone will play an important role in this market, not just making payments easy, fast and transparent but also making them easier to track and verify. The economic need will also drive innovation in the transactional landscape. For example, the need for small business owners to make and receive mobile payments via their mobile phone will continue to increase in turn, creating efficiencies in supply chains.
Could cell phones eventually replace traditional payment methods?
Research by the McKinsey Global Institute has shown that delivering financial services by mobile phone could add an approximate US$3.7 trillion to emerging economies in the coming 10 years – and mobile payments are only expected to grow exponentially. Sub-Saharan Africa, in particular, has been pinpointed as a region where mobile payments will have mounting importance – according to a report by GSMA, 85 percent of all new mobile money accounts opened in 2015 were in sub-Saharan Africa.
Identifying areas for innovation
With this in mind, mobile has long been a focus of ours, with the introduction of Masterpass QR recognized as a bold move forward in the digital payments space. We continue to identify areas for innovation and collaborate with the right partners to create solutions that will take us to a world beyond cash.
What is your focus segment by industry? Is there any specific industry segment that you see to have increased potential, but have not yet penetrated?
In the increasingly intertwined payments and technology sector, the focus needs to be holistic in order to conceptualize and implement the most effective solutions with the greatest impact on those who continue to be excluded from the financial mainstream. This is why we focus on industries across the spectrum to identify broad trends, as well as work with partners that run the gamut from governments and multi-national companies to niche entrepreneurs and start-ups in order to pinpoint specific needs that must be addressed within communities across the continent. Essentially, it is going to take a wide range of sectors to achieve inclusive growth, and we will need all partners across these sectors to work together to find workable and scalable solutions, this is why we place such great emphases on partnerships.
What’s it like to be in a business that’s changing the world?
It is our hope that with continued collaboration, Mastercard will carry on providing more inclusive and integrated payments solutions that will improve the lives of citizens across the African continent and increasingly bring them into the financial mainstream. It is also for this reason that we will continue to partner with market leaders who share our views to introduce innovative and practical payment initiatives that will help position Africa as a leader in digital and mobile payment ecosystems.