From Bean to Brew: Mastercard and Neumann Kaffee Gruppe Set to Digitize Payments for Smallholder Coffee Farmers

As I get older (or wiser, the kind souls around me might say), I often find myself pausing to think about things we take for granted. Where in the world did the milk in my cereal come from? Who grew the beans that created the dark roast flavor of my coffee? Do they know it’s made it all the way over to my kitchen on the East Coast of the U.S.?

Companies around the world are asking similar questions of their supply chain; looking for new ways to understand the entire operations’ impact, and so a revolution is upon us. To digitize. And one way they’re doing this is by moving away from cash and towards electronic payments.

Taking the cash operations out of systems has many benefits. Imagine, for example, if farmers were paid electronically vs in cash. This would create a digital trail back to the farmer. Which could create traceability in the supply chain. Which can help reduce operational costs and add value for the major corporations that buy and sell such raw materials. But, it’s more than that. It could bring the 125 million farmers from around the globe who rely on coffee for their livelihood, and who are trapped in a cash economy, into the world’s formal economy. Or as we say at Mastercard, Financial Inclusion.

That’s why I’m so excited to announce our global partnership with Neumann Kaffee Gruppe, the world’s largest coffee merchant. We’ve joined forces to tackle the cash problem head-on by developing an infrastructure for smallholder coffee farmers to bring electronic payments to these underserved communities. Working with banks, merchants and farmers, we’ll ensure these farmers receive their pay securely, and can use it for whatever they need securely and conveniently. Think, for example, about how an electricity bill is currently paid in cash. Often it’s a trip to a nearby village or utility cash collection center to stand in line and pay. Why not change that to the push of a button on a phone from wherever you are?

We’ve heard plenty from the financial community about financial inclusion, but we’re doing a lot more than talking about it. Mastercard is more than halfway to reaching our pledge of bringing 500 million people into the formal economy because we’re doing things differently. We’re finding sizable industry opportunities, looking at the entire ecosystem and creating products and services that are scalable and replicable.

The timing of this announcement is quite fitting – Mastercard and Neumann are standing together in the midst of the IFC Global Agribusiness Conference in Amsterdam. Leaders within the agriculture space came together for a two day symposium to talk about innovations for smallholder supply chains. The International Finance Corporation (IFC), formed by the World Bank, is an incredible partner to Mastercard in driving the inclusion of millions of individuals, small merchants and micro businesses out of the cash trap and into the formal economy.

This is just the latest example of how we continue to bring people into the financial mainstream. We can’t wait to get started and bring this capability to other partners around the world. In fact, we’ve also already started digging in deep to understand the challenges of factory workers within the garment manufacturing industry.

So please, reach out or comment below if you’re interested and want to hear more.