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News

Paymentology partners with Mastercard

Wednesday 16 August 2023 12:48 CET | News

Global issuer-processor Paymentology has announced its extended partnership with Mastercard to improve financial inclusion across Guatemala, Honduras, and El Salvador.

According to a Mastercard and Americas Market Intelligence study from June 2023, while most Latin Americans secured access to basic financial products between 2020 and 2023, 21% are still excluded, mostly relying on cash payments. Moreover, in Guatemala, Honduras, and El Salvador, only one in four banked citizens own a debit or credit card, accentuating the barriers to accessing the financial system within the region.

Global issuer-processor Paymentology has announced its extended partnership with Mastercard to improve financial inclusion across Guatemala, Honduras, and El Salvador.

As per Mastercard’s officials, the partnership with Paymentology aims to build a more inclusive financial ecosystem in Northern Central America by providing the technology, support, and efficient processes that financial institutions and fintechs require to expand. Both companies will work with partner financial institutions, fintech companies, and telcos to enable them to offer financial services and solutions to unbanked and underbanked citizens and SME owners. Some of these tools include digital and physical debit or prepaid Mastercard card programs and micro business cards designed to their distinctive demands.

Digital finance in Latin America

While 79% of Latin Americans have access to basic financial products, a gap still exists among these individuals in achieving more improved forms of financial inclusion. Currently, cash payments are co-existing with digital payment methods, even if the use of cash for daily expenses has decreased. Before the COVID-19 pandemic, 25% of respondents specified that they used cash for approximately 75% of their monthly expenses, however, in 2023, the number dropped to 15%. Considering they are still in the early stages of digitisation, Peru and El Salvador saw a reduction of 8% and 5% respectively in the use of cash. In order to limit cash payments, digital payment providers need to offer solutions that deliver relevant incentives for payers, consumers, as well as merchants, including mobile payments, as smartphone penetration has reached 80% across the region. 

According to Statista’s report, Latin America’s fintech environment is advancing, therefore improving the delivery of financial services in the region. Local governments have also become supportive of fintech, due to the increasing investments and pronounced interest in the Latin America region. 

Mastercard’s input in Latin America

Back in June 2023, Mastercard selected five startups to support SME innovation through its engagement programme Start Path. Cumplo, DigiAlly, PayGoal, Tribe Fintech, and Uome have joined the cohort to discover innovation opportunities and solutions that aid digital experiences for SMEs globally. 

Mastercard expanded its Engage platform in 2021 to provide customers with easy access to a network of technology and fintech partners that can implement Mastercard Digital First solutions in Latin America and the Caribbean. Galileo and Tutuka, G+D, Thales and Verestro, MO Technologies and Juvo, and Provenir were some of the partners that joined Engage to help expedite digital first implementation in the region.  

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Keywords: financial inclusion, SMEs, financial services, financial institutions, fintech
Categories: Payments & Commerce
Companies: Mastercard, Paymentology
Countries: Latin America
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Payments & Commerce

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