PURCHASE, N.Y. — Mastercard is partnering with International Finance Corp. on a $500 million global facility designed to help banks and fintech companies in emerging markets gain access to digital payment infrastructure and expand financial services to underserved consumers and small businesses.
The new settlement exposure facility is intended to reduce financial barriers that can prevent financial institutions from participating in Mastercard’s global payments network.
IFC is a member of the World Bank Group focused on supporting private-sector development in emerging markets.
Mastercard said the initiative builds on previous collaborations between the two organizations and is part of a broader effort to combine capital, technology and distribution capabilities to bring more consumers and businesses into the formal financial system.
Reducing Barriers for Financial Institutions
According to Mastercard, financial institutions in some emerging markets face collateral and other financial requirements that can make it more difficult or expensive to expand digital payment services.
The $500 million facility is designed to help address those constraints while maintaining risk-management standards.
Mastercard said the facility will:
- Help financial institutions in emerging markets participate in its payments network.
- Provide more cost-effective access to modern payments infrastructure.
- Support banks and fintechs seeking to expand digital financial services.
- Increase access to electronic payments for underserved consumers.
- Help micro-, small and medium-sized businesses participate more fully in the digital economy.
“At a time when economic uncertainty, digitization and shifting global dynamics are widening the gap between those connected to the digital economy and those still left outside it, expanding access to trusted financial services has never been more urgent,” Jon Huntsman, Mastercard vice chairman and president of strategic growth, said in the announcement.
Huntsman said the partnership is intended to help banks and fintechs connect more fully to global payment systems while expanding access to secure digital payments.
Focus on Small Businesses
Mastercard said expanding electronic payments can help underserved individuals and businesses enter the formal economy, reach additional customers and build more resilient businesses.
IFC Managing Director Makhtar Diop said collateral requirements can be a significant obstacle for financial institutions seeking to expand those services.
“Expanding digital payments in emerging markets is one of the most powerful tools to create jobs and bring people into the formal economy,” Diop said.
He said enabling small businesses and women entrepreneurs to accept card payments can provide access to more customers and revenue while establishing a foothold in the digital economy.
The new facility follows a recent IFC announcement focused on expanding secure and accessible financial services in emerging markets, according to Mastercard.
Mastercard Sets 2030 Goal
The initiative also is part of Mastercard’s broader financial inclusion and financial health strategy.
The company said providing access to financial services alone is not sufficient and that security, trust and resilience also are necessary as more consumers and businesses participate in digital financial systems.
Mastercard has set a goal of helping connect and protect 500 million people and small businesses on their paths toward financial health by 2030.
The company said the new IFC partnership is intended to create a scalable model for expanding digital payment infrastructure while helping financial institutions overcome barriers that can limit their ability to serve customers in emerging markets.
