Mastercard and Unilever are collaborating on a series of initiatives centered on proliferating digital and mobile payments infrastructure to help small and micro-businesses in emerging markets.

According to the World Bank, there are somewhere between 365 and 445 million micro, small and medium enterprises in the developing world, representing the economic backbone of many local communities. Through matching up Unilever’s network of distributors in developing countries with digital payment and acceptance solutions from Mastercard, the partnership will look to expand Mastercard’s digital and mobile payments footprint and help communities, as well.

“Two billion adults worldwide are unbanked and some of the lowest rates of financial penetration are in emerging markets,” said Philip Herrey, vice president of enterprise partnerships at Mastercard. “Banks are the primary way to access financial tools in developed countries but in emerging markets people largely depended on cash and are excluded from traditional financial services because of remote locations, limited branches and lack of literacy.

“A combination of mobile penetration and governments’ desire to boost financial inclusion and reduce the use of cash is fueling mobile financial services and payments in emerging markets,” he said. “Payment technology companies, banks and startups are looking at new and innovative ways to solve the issue of financial access through mobile technology.

“Take Kenya for example – the market has a high rate of adoption when it comes to mobile technology. According to the Mastercard Impact of Innovation Study, preference for mobile payments remains very high in Kenya at 87 percent, with 96 percent of Kenyans using their feature phone or smartphone as their primary device according to the survey. As a result, Kenya is using mobile to democratize financial access.”

Emerging markets
As a first step, Mastercard and Unilever will explore ways to enable better access to formal financial tools for smaller retail outlets while also building entrepreneurship capacity, particularly for women and girls. Additional focus areas may include joint efforts to increase the usage of electronic payments across both wholesale and retail locations.

The partnership held its first pilot project in Kenya, a country that contains many of the small and micro-businesses that Unilever and Mastercard are looking to assist.

In Kenya, the companies are jointly designing a program to enable sustainable growth of small retail entrepreneurs. By digitizing the processes of buying supplies and selling goods small vendors will gain access to low-interest credit.

This will empower them to better answer shopper demand and grow their business while familiarizing themselves with basic insight tools, giving merchants more resources, such as access to market information, better access to funds through mobile and digital platforms and better understanding of finances, to scale their businesses.

The partnership was originally announced at last week’s Mobile World Congress in Barcelona, Spain.

Mastercard and Unilever
It is no surprise that a financial services company would invest in digital technologies, but the rate at which Mastercard is investing on mobile, especially in its Masterpass platform, is high, even for the sector.

The company recently unveiled the Digital Vendor Directory, a repository of all retailers and brands that are compatible with Masterpass as well as what mobile offerings they have for consumers. The project is an attempt to motivate consumers to use Masterpass more often by helping them become aware of where it is a viable option (see story).

And Unilever itself has been no stranger to mobile innovation, especially when it comes to investments in partnerships: a Mindshare executive at Mobile Marketer’s Mobile FirstLook discussed how Unilever’s Dove and Hellman’s brands built campaigns from core consumer insights that were a hit on mobile and showcased the power of native integrations (see story).

“Mastercard is taking a mobile-first approach to emerging markets like Africa and India, designing solutions that work across devices – web, smart phones and feature phones,” Mr. Herrey said. “For example, Mastercard has launched Masterpass QR in both India and Africa to make it easier for small and medium sized merchants to transact with consumers eliminating the need for point of sale systems and using phones to facilitate real-time payments.”