MasterCard Invests in Increasing Financial Inclusion for Underbanked

Sep 23, 2020 at 11:52 // News
Coin Idol
Project aimed at financial inclusion of the underbanked

A financial services company dealing in processing digital payments between the banking institutions of merchants and the card-issuing banks, MasterCard, is capitalizing in an investment project aimed at financial inclusion of the underbanked.

For so long the Black community in the US has been neglected and left behind as far as development is concerned. So, in the process to develop this community many programs viable are being put in place to help the Black residents also copy up with others.

Especially in this era of Covid-19 pandemic, the Black communities such as Louisiana, Albany, Michigan, Chicago, etc., have been mostly hit hard by the pandemic both health-wise, socially and economically. The Black vulnerability has been intensified by the continued incompetence of the Fed in response to the Covid-19. The many deaths of Blacks in the US is hinged at centuries of disinvestment and institutional neglect of Black communities, the Fortune reported.

In 2018, the Federal Reserve projected that there are almost 55 million unbanked or underbanked grown-up American nationals, and this makes about 22% of Households in the US. Unfortunately, most of these households are found in the Black communities - the state of Mississippi which has 37.8% of the state's population as Blacks (1.123 million, as of the 2019 U.S. Census) had 16.4 percent unbanked. At that time, the countrywide rates were at around 8% unbanked and 18% underbanked.

Now, MasterCard has pledged about $500 million to boost and promote financial inclusion in the Black communities in the United States to help minimize the racial opportunity and wealth gap. The investment is designed to assist financially neglected Black societies more easily and effectively access monetary products, services, and support. 

Cryptocurrency and Blockchain are Transforming the Underbanked Population

The company is trying to surge capital flow to businesses owned by Blacks and also make digital financial products including digital currencies cheap and easily accessible to most of the unbanked and underbanked Black customers in the country. This is the right timing to address these inequities. The payment giant will collaborate with Black-owned fintech company MoCaFi on a collection of cheap, digital financial products including cryptocurrency, and this will help people to easily access their money.

Because of the increasing maturity, demand and use of cryptocurrency around the globe, MasterCard is expanding its digital currency program to enable firms participating in this field of blockchain and cryptoasset, issue their own payment cards. The company in question recently signed a deal with Wirex that allows it to directly issue cards on MasterCard’s network.

Digital solutions such as Bitcoin help in expanding financial inclusion. Blockchain technology is playing a big role to improve people’s life and wellbeing especially in countries where poverty and unbanked population is high. These people cannot acquire bank loans or earn profits from their bank savings, hence making it hard for them to develop financially. But with cryptocurrencies, one can invest in them and reap big when the prices go high – and it just takes only the internet to do this investment. There is no lining up when withdrawing your earnings as it is the case in banks.

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