Name: Balancing the Ledger: Mastercard's Mission of Economic Inclusion
Uploaded: 2019-06-03
Duration: 10 min 23 s
Description: Shamina Singh stops by to talk about how Mastercard is implementing technology to help entrepreneurs in developing economies.

[ MUSIC ] Welcome to Balancing The Ledger. where tech and finance intersect. I'm Jen Wieczner. And I'm Jeff Roberts. And today we're joined by Shamina Singh. Welcome Shamina. Hey, thanks for having me. So you are the Executive Vice President of Sustainability at Master Card. And in 2013 you founded Master Card's Center for Inclusive Growth. What was the business case behind that? It's funny. We started at Master Card looking at the role of financial inclusion. And the role of people who are really have been left out of the economy during this whole digital evolution or revolution depending on where you are sitting. And realize that the role of Master Card in that conversation was about connecting people and bringing them into the formal economy so that they could enjoy the full protections that come with a regulated Financial system. So I actually started out on the business side at MasterCard when I joined because I was working with governments around the world to help digitize their social benefit programs. And all of the learnings that we started finding when we started getting into these conversations about with low income people In developing markets realized that there weren't a lot of businesses in the space. And we actually created the Center for Inclusive Growth as a way to bring all of the learnings together in one place and open source them because we realized that This wasn't a once in a blue moon activity, this was a trend that has only become more prevalent. And so we wanted people to learn from our mistakes and ours solution. I mean, I find this really interesting because normally in this show we talk about the future of payments and cutting edge cryptocurrency and stuff, but it seems more like we're in a real world And, it sounds like you worked it a lot. Who is still using cash? Sounds like a lot of people, so tell us a little bit about the cash economy and, you know, who's part of it. Yeah, so it's everybody's part of it. But what we know, approximately eighty five percent of all transaction are still conducted in cash. Globally that is. Globally in the world, about 30 % right here in the United States. And so, when you're working for a company like MasterCard, which is in the digitization of payment space, it really opens up from the business perspective, a runway of opportunity. If Cash is your competitor instead of any other payment company. And so that's really where all of this started and once you start to really dig in to the costs of cash, like, how much it, you know, the transparency issue, the leakage issues, the corruption issues, it starts to get you really thinking about. Hah, if you started to disrupt cash with digital, what would that mean for more people in the world? And how are you disrupting, I mean what is some of the technologies and innovations that you're applying to do this? So you know it's funny. Have you, do you know what the QR code is? Yeah. I did. Okay. So QR codes. A really disruptive force in emerging markets. Because what they allow is they allowed the same level of technology that you would get from a three hundred dollar point of sale device that you might see at a grocery store or big market a QR code is a very inexpensive. Way for a small merchant in a emerging economy to process transactions. So we actually created these standard for India. And so, the QR codes standard for India was actually created by MasterCard and adapt, and adopted by the entire country. And at one point I was in India very recently. And. I actually took a rickshaw using a QR code. Wow. I've been to India many years and many times. And the idea of actually not having to fish around for rupees or change or whatever, and actually jump in a rickshaw, which is a very small motor scooter, To get from point A to point B and pay with my phone, it's pretty cool. How similar is the technology that you're deploying in the these emerging markets to what businesses and customers here in the US do for us ?>> It's interesting because we actually think of it sort of as a reverse innovation. So in the United States, for example, The banking system is so mature here. And the legacy systems are all here and the regulations are all here. And some of these emerging markets, you don't have things like credit scores or credit agencies like they're just now coming online. And so all of these things are being developed now in real time in emerging markets. So part of the interesting thing has been for us. Because we're a global company to look at the solutions and some of the emerging markets and try to adapt those solutions in more developed markets. And so it's a little bit of a reverse innovation play that I think is really interesting. You give an example. Sure. So here in the United States, for example, lots of people use payday lenders and because they don't have access to banking systems, lots of Very very small micro business owners don't have collateral and, the same way that maybe a big business centers had. So, we actually had a partnership with City and Apple where we worked with an organization right here in New York City to help very small business owners called Micro Finance Organizations with Garmin, USA Who had been transacting in cash for these very tiny loans, average size 2500 maybe transacting in cash and to say we're going to train you, we're going to provide these lending services. But it costs a lot to spend the time doing that in the safety that is a huge concern. So actually worked with city and Apple to say Let's upgrade the technology, let's make sure they get bank accounts and le's make sure that they have the equipment they need to bring more efficiency to the payment system and actually more safety. What that's meant for the shop owners is that they are able to conduct business more efficiently but this [ UNKNOWN ] USA is actually triple liability to [ UNKNOWN ]. So what is [ UNKNOWN ] So [ UNKNOWN ] is a micro finance organization. But in the United States it's actually called a community development finance institution. So it's a treasury designation basically that allows banks for to lend money to these types of organizations. Then these organizations can lend to people with very little means With matebook, who may not have credit scores or the collateral that they would need to go to a larger bank to get the same, right And you're saying up until now this organization is providing these women entrepreneurs with like stacks of cash Yeah, depending Yeah. On what you know, it was it's pretty interesting. You would think that we wouldn't see that right in the United States, but that's actually more prevalent than you would think. I mean look when you're trying to pay your bills or you're trying to start a business or you're trying to sell flowers or do whatever, you know, you're not thinking of, you know, 033 franchises and 10 big businesses and a hundred Floyd. You're trying to think about I'm a, I'm a woman, I have kids, I'm balancing school, I'm balancing [ INAUDIBLE ] things and I wanna start a business, and I wanna feed my family. So, you start with where you are and i think that's what so interesting about these organizations, is that they are solving people at all levels of the economy. That's really interesting. And what are the benefits for them of moving away from cash and doing this all digitally? So, for these women for example who are Starting their business. Working on the digital environment is not their everyday, they're not digital natives, if you will. And so, the idea that they might be able to grow their business exponentially by going Going digital and by getting the tools that they need and the lending education that they need in order to grow their business more effectively. We're seeing scale in a way that that we hadn't seen before. So when you move out of a cash system, you can actually transact with people you can't see. So when you're dealing in cash, you can only transact with people you can see or people that you trust enough To carry your cash to another place. But you're really constructed. One thing we haven't talked about that's a component of this is data. A lot of what you're doing here is data driven. Can you talk a little bit about what you're doing there and what the insights that you're getting are Sure, because it's really important. You know, I know that for your most of your guests probably tell you a lot about, you know, like a big data and how data is going is transforming the world. That's true. But you know what else is happening? We're seeing a bigger and bigger gap form between the data haves and the data have nots. So here's an interesting thing just about credit score, right. So I mentioned before the shop owners and looking at their buying and selling habits with their partners like Unilever, so we have a partnership right now in Kenya. Where we're working with Unilever to say can we help the shop owners that are in your supply chain, who you know are credit worthy because you see them buying from your supply chain every day. Can we use that as a proxy for credit score to get them a low interest loan from a regulated bank, that's the idea of using, it's not high tech low tech, this is about using tech For where it matters the most and how to help the most People. You've also have a new partnership with the MTA, New York the subway? Yes pretty exactly. Listen I'm personally exited because as in New Yorker i have been here for. Many many years and having been somebody who fumbles around all the time like carrying my back pack and my purse and everything else, this idea that you always have you phone out or you always have a card handy that you can just go tap and move through, that time efficiency I think is gonna be a big time saver for a lot of people, for [ INAUDIBLE ], Time is money, and that's everything. Can Mastercard do anything about the rats? [ LAUGH ] We'll have to save that for next time. Thank you so much for being here Sharmina. Thanks for having me, really appreciate it. I'm Jen Wieczner. And I'm Jeff Roberts, for more Balancing the Ledger, please go to Fortune. com. We'll see you next time. [ MUSIC ]

Balancing the Ledger: Mastercard's Mission of Economic Inclusion

Finance

Shamina Singh stops by to talk about how Mastercard is implementing technology to help entrepreneurs in developing economies.