PYMNTS-MonitorEdge-May-2024

MasterCard’s Digital Road To Humanitarian Solutions

With MasterCard’s announcement today of its partnership with World Vision, the company is moving forward in its quest to affect developmental and social outcomes in a commercially and operationally sustainable way. Tara Nathan, EVP, Public Private Partnerships at MasterCard, shares with MPD CEO Karen Webster the factors and methodology that put MasterCard on this path.

MASTERCARD

MasterCard announced today (April 4) that it has entered into a partnership with the international humanitarian aid organization World Vision through which it will support that group’s efforts with its own expertise, products and services.

“It’s an implementation of our public private partnership strategy that began three or four years ago,” Tara Nathan, Executive Vice President, Public-Private Partnerships at MasterCard, told MPD CEO Karen Webster in a discussion prior to the announcement.

Toward that strategy, about 18 months ago, MasterCard brought together experts from across its organization and NGO practitioners to discuss the challenges that NGOs were facing in aid delivery. Out of those talks was born the MasterCard Aid Network, of which the World Vision partnership is the latest extension.

“Our perspective overall is that public private partnership isn’t philanthropy and it’s not CSR [corporate social responsibility],” comments Nathan. “It really needs to be about how we can leverage our core competencies as a company to accomplish developmental and social outcomes in way that’s commercially and operationally sustainable.”

Nathan shares that while it’s easy to get enamored with the “whiz-bang” of the purely technical aspects of innovation, the World Vision partnership actually aligns more appropriately with MasterCard’s pursuit of innovations on the business model side and the go-to-market strategy side of things.

“It’s hopefully going to be a good model for how the PPP [purchasing power parity] space can evolve,” she tells Webster.

As World Vision is involved not only in responding to crises that occur but is also a leader in development — including building economies and societies, empowering women and children, and actively engaging in microfinance — Nathan views the organization as sharing a key perspective with MasterCard, which is that “crisis response and humanitarian response cannot happen in isolation.”

All of the products and solutions that MasterCard builds are rolled out with “an eye towards everything being, at the point of intervention, a continuum in the sense of a leave-behind infrastructure that fosters the actual development and reconstruction of those nations and economies,” says Nathan.

In that regard, the ability for MasterCard to actually operate in conflict environments is one of the unique characteristics that a digital payments infrastructure and digital companies bring to the humanitarian community.

Referencing a pilot program that the MasterCard Aid Network carried out in Yemen, Nathan tells Webster that one thing MasterCard found to be interesting from a products and service perspective and “incredibly impactful to the service deliverers and the end beneficiaries” was the ability within a digital infrastructure to remotely provision.

Beyond the added layer of safety and security that digitizing a delivery provides — which, as Nathan notes, is incredibly important in a conflict environment — remote provisioning avoids the necessity for recipients of goods to have to redeem them all at once, thus reducing the danger (both for the aid workers and the beneficiaries) inherent in that process of “cuing them up,” as it were.

When aid recipients have access to a digital account, it provides a window into a number of services that are needed and desired by them on the path toward a more financially inclusive environment. In Nathan’s perspective, no element is more critical in that respect than digital identity, which in the case of refugees extends beyond financial access to include basic human needs.

Describing MasterCard’s viewpoint on its process of developing products and solutions as a “ladder of services,” Nathan posits that an even “lower rung,” as it were, than the MasterCard Aid Network is the MasterCard Identity product.

“One of the first things you have to do is identify the beneficiaries in a secure manner,” explains Nathan, “helping them to create standards around the process of data storage and management.”

That is leveraged into the next step on the ladder, which is the construct of digital vouchers and their ability to deliver goods and services without financial institutions necessarily being in place. Building on that identity layer that can then be leveraged for the next step, which is full financial inclusion … which in turn creates the ability for beneficiaries to seek employment, participate in commerce, et cetera.

“Identity is something that we take for granted in the developed world,” observes Nathan. While, in the U.S., for example, many people think of identity as the thing you use to get into a bar, for inhabitants of underdeveloped regions, identity is “a principled driver of their social, economic and political exclusion.”

And that’s a gap that Nathan says MasterCard is passionate about addressing.

In putting together its partnership (announced last month) with UN Women that explores the importance of identity across populations, MasterCard brought together a number of civic groups to talk specifically about the pain points that women in disaffected regions face as a result of lacking digital identity.

Nathan recounts to Webster how moved she was by some of the reactions that women from local civic societies had to the notion of the capabilities that a digital identity could provide them, such as paying remotely for school fees and receiving remittances.

“Basic things that we take for granted [in the developed world] are, for these women,” says Nathan, “a fundamental part of their daily existence” — and one that they in many cases are lacking.

With its efforts represented most recently by its partnership with World Vision, MasterCard is dedicated to working toward making those lives whole.

PYMNTS-MonitorEdge-May-2024