MANILA, Philippines - As one of the largest technology companies in the international payments industry, MasterCard is stepping up efforts to play a vital role in bringing down the ranks of the financially underserved, a top company official said.
In an exclusive interview with The STAR, MasterCard South East Asia president Matthew Driver, said while some countries are coping up with the challenges of financial inclusion initiatives, there remains some areas of cooperation which need to be explored by both private and public sector to be able to come up with an efficient and effective business model to increase the number of people benefitting from the technology of the financial system.
Driver presented during the World Economic Forum on East Asia MasterCard’s recent report on financial inclusion which profiles six markets in Asia-Pacific, Middle East and Africa (APMEA) region : India, Vietnam, Indonesia, Egypt, Nigeria and the Philippines.
“The main strategy for financial inclusion is to promote awareness. We have to let people know that we have technology and digital services that are available for them,†he said.
He noted that some 2.5 billion are excluded from the financial system.
About 85 percent of the world’s population are still using cash and only 15 percent are hooked up electronically.
“Obviously, if you are excluded from the financial system, you have a number of impediments related to your ability to provide for your family.â€
Driver said financial literacy is also crucial. This is where, he said, cooperation of all stakeholders from the industry should give their respective shares.
“It is really interesting that the Philippine government is using e-payment in some of its procurement transactions, †he said.
Driver said MasterCard is also closely coordinating with non-governmental organizations (NGOs) and various telecommunications companies such as Smart and Globe to explore more ways on how to let people especially those living in far-flung areas, the benefits of getting rid of informal banking practices.
“We must come up with the most organized and systematic way of letting the unbanked and underserved population that access to financial services is a basic human right. Everybody should benefit from these digital technology,†he said.
Based on the Mastercard-commissioned study launched in September 2013 and completed early this year, roughly half of the world’s adult population lack access to formal financial services.
Financially excluded are those who do not have access to formal banking facilities, while the financial underserved are those who do not have access to any form of electronic payment.
In a statement released in Singapore recently, Driver said: “Understanding the needs and attitudes of these consumers has provided us with important insights. For example, the financially excluded or undeserved in urban centers are reasonably well-educated and largely employed, so inclusion efforts in cities should be primarily focused on building relevant, lower cost products and services rather than basic financial literacy. This means that with the right approach there is huge immediate potential in such environments to bring many people into the financial system.â€
The profile of financially excluded and underserved showed that across APMEA, they are most likely to fall within the economically active age group (average ranges from 28 in Nigeria to 41 in the Philippines).
The report also showed that most of these unbanked individuals have achieved secondary education or above, and hold a job.