MasterCard is at war—with cash, says Mark Elliott, South Africa country manager for the credit card giant. The billions of people around the world (85% of the population) who still pay for goods with cash are vulnerable to everything from predatory interest rates (think: payday loans) to outright theft. The cash economy also costs governments billions of dollars in uncaptured tax revenue. In all, says Harvard Business School professor Sunil Gupta, the inefficiencies of cash can cost countries as much as 1.5% of GDP. MasterCard is operating on a mind-boggling number of fronts to fight that—working on over 500 financial inclusion projects. In one of the oldest, MasterCard has partnered with South Africa’s government to distribute social benefits on debit cards to more than 10 million recipients. The previous system was leaky and inefficient, forcing people to travel to centers where they’d queue up for cash. The switch to electronic payments reduced fraud and has saved the South African government more than $250 million in the past two years. MasterCard declines to say how much revenue is generated by the partnership, but says that both this and its inclusion efforts overall are profitable. “The margin size is small, but the scale and mass is what’s bringing sustainability,” says Elliott. And when he says scale, he means it: MasterCard estimates that since 2013 it has brought more than 150 million people to the formal financial table.
