Mastercard & American Red Cross Launch Mobile Disbursements Program for Humanitarian Aid

While 2 billion people around the world currently lack access to a bank account, global mobile subscriptions reached a staggering 7.1 billion last year and are soon expected to surpass the world’s population. Not only is mobile technology a starting point for bringing those excluded into the financial mainstream, it is quickly becoming an effective tool for the delivery of humanitarian aid.

That is why Mastercard and the American Red Cross, with its partner Indonesian Red Cross, launched a pilot program to use Mastercard Send  to distribute funds digitally to families in Indonesia via their mobile phones for the purchase of water and other items during the drought season. The partnership marks the first expansion of Mastercard Send into the humanitarian sector.

Photo by Otto Ferdinand

“Our goal is to provide an innovative service that enables humanitarian and development organizations to distribute funds efficiently and digitally to their beneficiaries,” said Shari Krikorian, vice president, Digital Payments and Labs, Mastercard. “Using Mastercard Send, organizations like the American Red Cross can initiate and electronically control the distribution of aid funds end-to-end through a single interface.”

Mastercard Send leverages technology built for remittances services to connect to a wide network of mobile network operators, banks and money transfer organizations worldwide. The technology enables humanitarian organizations to deliver funds through different channels – payment cards, mobile money, bank accounts and cash-out agents – from anywhere in the world. In addition, with access to a mobile wallet or a payment card, beneficiaries can receive other types of payments such as electronic remittances from friends and family abroad via the same method.

Using Mastercard Send and the local telecommunications partner Indosat Ooredoo, beneficiaries in Indonesia were able to receive funds from the American Red Cross into a registered mobile wallet, providing a safe and convenient way for them to access aid via a phone many of them already have. Receiving digital funds also gave them the control and flexibility to spend their aid money on what they need most.

For example, many of the recipients reported using their funds to purchase clean drinking water, groceries, hygiene supplies, and even help pay for their children’s education. One beneficiary said, “Sometimes families receive goods they might not use. [Digital money] allows people to buy what they need.”

“We were looking for a partner that could help us expand our aid delivery channels and reach a large number of beneficiaries effectively and securely,” said Tracy Reines, American Red Cross.  “We view mobile technology as an innovative mechanism to support cash transfer programs and are excited at the potential to use Mastercard Send as a way to improve the distribution of cash-based humanitarian aid.”

The partnership with the American Red Cross marks the latest in which Mastercard is using its technology to help international organizations improve the distribution of humanitarian aid to refugees, internally displaced persons (IDPs) and those in impoverished and disaster-affected communities. To-date, the company has facilitated the electronic transfer of aid to over 2.5 million people and was recently recognized for these efforts on Fortune’s annual Change the World list.