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Banking on innovation to create digital economies.

Africa has emerged as a centre of innovation, particularly in the development of digital economies. Every day, this is proven through the introduction of new and more relevant solutions that truly make a difference in people's lives. It is this that drives Mastercard: the desire to develop a cashless Africa.

Keeping a finger on the pulse of trends that impact the lives of people on the continent is helping Mastercard to overcome challenges and deliver inclusive solutions. One of the key trends having a significant impact on how people engage with the world around them is the mobile device. Mobile phone penetration is forecast to pass the 100 percent mark as early as 2021--indicating that the technology will be a platform that should be focused on given the ease of access. There are naturally challenges to still overcome, such as data costs, but the mobile phone is presenting exciting opportunities to connect and empower millions of people more efficiently than ever before.

In this way, investing in the development and implementation of payment systems, driven on mobile devices, is imperative to move Africa and its people forward. Mastercard devotes extensive resources and time to crafting tangible systems and tools that enable all of the continent's citizens to participate in the formal economy, with focus on building sustainable partnerships.

Invested in the continent, Mastercard values the importance of working with partners across sectors to displace cash through smart technology solutions. These partnerships with financial institutions, merchants, governments and businesses are helping to make payments safer, simpler and quicker than ever before.

Partnerships across the public and private sector have resulted in notable milestones being achieved, including the introduction of Masterpass QR, which was first introduced to the African continent in Nigeria in August 2016 and has since also been launched in Kenya, Rwanda, Tanzania, Uganda, Senegal and Ghana with Ecobank. Altogether, the solution will be rolled out in 33 markets and is focused on including 100 million new consumers, all of which will benefit from the mobile-driven, interoperable Person-to-Merchant (P2M) payment solution's ability to bring businesses and citizens into the financial mainstream.

Masterpass QR allows micro, small and medium enterprises (MSMEs), to accept secure payments via their mobile banking app. The solution removes the historic challenges of acceptance of electronic payments as well as cutting down the high cost of installing payment infrastructure such as point-of-sale devices. As a direct result of enabling acceptance for merchants, Masterpass QR facilitates operational efficiencies for these small business owners, who are widely recognised as the engines of development in emerging market economies. These enterprises, according to the World Bank, create four out of five new jobs in these economies.

Not only is the solution making a meaningful difference to these merchants, it is also positively impacting consumers, who are given the peace of mind of being able to pay for in-store purchases by scanning the Quick Response (QR) code displayed at the checkout on their smartphones, or by entering a merchant identifier into their feature phones--anywhere that Masterpass QR is accepted. This opens up significant opportunities to transact that were previously withheld from these citizens, therefore driving financial inclusion in a real and measurable way.

By working to introduce more solutions that embrace the disruptive power of technology, in particular mobile, companies i can ensure that more people can enjoy life-changing financial freedom by being able to accept and make payments seamlessly and safely.

Additionally, Mastercard has worked with its partners to invest in agriculture, a sector that accounts for nearly 30 percent of GDP in East Africa and employs over 60 percent of the population. To help overcome the challenges that farmers and other players along the value chain face and to streamline the sector, the Mastercard Lab for Financial Inclusion introduced 2Kuze in Kenya and eKilimo in Tanzania. It connects farmers, buyers and agents through both feature and smartphones and facilitates the entire transaction, removing the need for farmers to walk long distances to sell their produce at markets, or to sell produce at a reduced value given that they are able to agree on the price upfront.

Cashless solutions are going to act as agents of change for millions of Africans. Because Mastercard recognises the power of collective action, it aims to collaborate with like-minded partners--and these partners are not just found in the private sector. Governments play a critical role in driving the financial inclusion of their citizens.

A vital initiative in this regard is Mastercard's role as one of the official technology partners of the Government of Kenya to roll out the Huduma Card. The solution offers a safe way for Kenyans to transact and access critical public services such as education, healthcare and transport. Additional government projects are well underway in East Africa, with Mastercard and the Rwanda Development Board working to achieve the country's goal of ensuring 90 percent of its population are financially included by 2020.

Great momentum has been achieved through the partnership in the last year in meeting its goals of digitising numerous state services to improve efficiency and transparency, particularly in the areas of health, pensions and education.

These examples illustrate how effective partnerships, across the public and private sectors, help to displace cash, driving financial inclusion.

By Chris Bwakira, Vice President and Area Business Head, East Africa at Mastercard

Caption: Mastercard devotes extensive resources to developing mobile payment systems.
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Comment:Banking on innovation to create digital economies.
Author:Bwakira, Chris
Publication:African Business
Geographic Code:60AFR
Date:Jun 1, 2017
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