The Kenyan Wallstreet team has a chat with Gaurang Shah, Senior Vice President MasterCard Middle East and Africa for Digital Payments and Labs. The conversation zeroed on MasterCard products that will power the digital economy and gig workers.
Emerging Trends in Digital Payments
Gaurang commences by noting that the MasterCard’s Labs for Financial Inclusion in Nairobi was set up in 2015 in partnership with the Bill and Melinda Gates to promote financial inclusion. Some of the solutions that the Labs has developed include agro-network digitization promoting farmer to market dynamics, an educational solution such as digitizing school attendance and fee payment, supply chain digitization through partnerships with FMCG producers such as Unilever where micro SMEs can get stock credit thus promoting growth.
In addition, the Labs developed a merchant product where customers can use QR code scanning and USSD to make payments through mobile money at merchant stores. Gaurang adds that the latest development revolves around pay on demand where customers can take an item or service and pay as they consume. For instance, a customer can take a solar panel for Ksh20000 ($200) and make weekly or monthly contributions as they continue using the panel to light up their home or businesses.
MasterCard Fintech Express
MasterCard announced the Fintech Express Program designed to facilitate emerging fintechs’ launch and expansion. Fintechs in the Middle East and Africa will benefit from tailor-made solutions that will boost market entry and expansion in regional markets. The program will leverage MasterCard’s partnerships, expertise, technology, and global networks to enable start-up to produce innovative products for the digital economy.
The program is split into three core modules:
- Access: Enabling regulated entities to obtain a Mastercard License and access Mastercard’s network through a streamlined onboarding process
- Build: Fintechs as Processors/Enablers can become an Express Partner by building unique tech alliances and benefitting from all the advantages that MasterCard provides
- Connect: Fintechs/Start-ups, looking to add payment solutions to their suite of products, can easily connect with qualified Express Partners and go live with MasterCard in a matter of days.
Digital payment innovators will have the opportunity to add payment solutions to their suite of products, simplify the launch of payment solutions, and launch new Fintech products. MasterCard says that the new program was informed by active funding in the Fintech landscape in Nigeria, South Africa, and Kenya who represent the lion’s share of the investment.
MEA region fintechs focus on credit, insurance, wealth management offered through a centralized cloud-based platform. MasterCard says it will collaborate with Diamond Trust Bank, DPO Group, Selcom, and Tutuka on the Express partner program.
MasterCard’s Role in Growing the Gig Economy
In September, MasterCard released The Gig Economy in East Africa: A Gateway to the Financial Mainstream Whitepaper revealing that digital inclusion is a prime enabler of the gig economy.
Gig economy is based on short term, temporary and flexible independent contractors. Research-based estimates in 2019 put the total size of the online gig economy in Kenya at USD 109 million, employing 36,573, while the offline gig economy comprises 5.1 million workers, and accounts for USD 19.6 billion.
Over 80% of respondents in MasterCard’s research said instant payments when a job is finished is the most desired feature of a gig platform. And in step with the prevalent mobile money system, about two-thirds (62%) of respondents said they prefer to receive payment through mobile money such as MPESA or Airtel Money because it is readily available, reliable, easy to manage, secure, and convenient.
In this case, Gaurang says that MasterCard has invested heavily by acquiring Transfast in 2019, a global cross-border money transfer company working with both P2P and B2B payments. The inorganic acquisition saw MasterCard build internal capacity to support freelancers and gig workers. Therefore, it can offer cross-border service, which is quick, affordable, and real time enabling freelancers to pay money through various financial institutions, telcos and remit money to bank accounts, cards or collect their funds through partners in various markets in the MEA region.
If a gig worker wants to sell their services digitally, MasterCard allows them to make payments via QR scanning. The process leverages in MasterCard partnerships with financial institutions, non-financial institutions, and telcos across various markets.