How the public sector can foster greater inclusion
November 20, 2023 | By Mark BarnettAcross Europe, millions of people are benefitting from faster, more convenient financial services than ever before. Thanks to the adoption of new payment technologies, Europeans can now pay for fuel, shop online, and split a restaurant bill without even taking out a card.
However, this is not the case for everyone. Over 13 million EU citizens still lack access to formal financial services, excluding them from the digital economy. While this number is decreasing, there remains a persistent need for more work to be done.
At Mastercard, we recognise the role we can play in addressing this challenge. Our inclusive growth mission is rooted in an ambition to connect one billion people to the digital economy by 2025, and I’m proud to say we’re already over halfway there.
As Europe progresses further into a digital era, the public and private sectors must come together to ensure no one is left behind. Together, we must build a connected world that offers everyone equal opportunities to leverage technology to improve their lives.
Inclusion through welfare
One example where we’re witnessing meaningful progress is government disbursements.
Against a challenging economic backdrop, Europeans are increasingly turning to their governments in search of financial support. In 2020, the total expenditure on social protection benefits in the EU amounted to over €4 billion – 30.4% total GDP.
Welfare payments made in cash are slower than using digital methods, also making it harder for citizens to manage their funds and opening the door to loss or theft. With three-quarters of Europeans now comfortable using digital financial services, there are no excuses not to evolve with them.
At Mastercard, we’re working with European governments to support them on this journey.
We’re increasingly rolling our prepaid solutions that make disbursements easier to receive, simpler to use, and safer. For example, we’ve successfully worked with the Ministry of European Funds to provide Romanians with social welfare via prepaid cards.
Action is required now
Ultimately, innovation cannot succeed without inclusion. At the speed technology is progressing, those left behind now will find it increasingly difficult to catch-up.
For this reason, we encourage EU decision makers to immediately put inclusion – both digital and financial – at the forefront of their agendas. Europe is one of the world’s most exciting regions for innovation, but it is only as strong as those it helps.
We would like to see policy and regulatory ecosystems that that put inclusion first and enable the development and uptake of solutions that welcome more people into the digital economy. It should match the Commission’s commitment to create a Europe fit for the digital age.
At Mastercard, we have long supported access and usage of financial services that promote inclusion. We will continue playing our role in supporting individuals, businesses and governments through the digitalization journey, and assisting policymakers navigate this complex environment.
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