Mastercard says it is committing $500m to help close the racial wealth and opportunity gap for Black communities across America.
The New York-based card giant promises to invest the $500m in Black communities over the next five years.
This commitment includes products, services, technology and financial support, as well as concentrated investments that will focus on providing Black-owned businesses and Black people access to affordable financial tools and capital.
“This is a time for action”
Ajay Banga, Chief Executive Officer of Mastercard, says:
“This is a time for action. We have an obligation as a corporate citizen to ensure the digital economy is enabled for all, an obligation to be part of the positive change Black communities so rightly need now.
We are starting in cities across the country with on-the-ground efforts meant to drive out inequities and create the opportunities, connections and resources that will spark economic growth for the long term.”
With half of all Black Americans excluded from the financial mainstream and Black-owned small businesses excluded from funding opportunities, the commitment is designed to foster inclusion by delivering immediate economic benefits, while driving a lasting impact on economic growth for Black communities, Mastercard says.
Mastercard will focus on three crucial areas:
Expanding city programmes to support Black communities
Mastercard will bring the full range of its assets including partnerships, technology, and data insights to ensure the quick and effective distribution of essential financial support and access to city programs.
In collaboration with city leaders, Mastercard is initiating efforts in seven cities including Atlanta, Birmingham, Dayton, Los Angeles, New Orleans, New York City and St. Louis.
As part of these activities the company will bring together identification, financial access and payment functionalities in one place through Mastercard City Key, enabling more than 1 million residents with digital access to essential financial tools and support.
Affordable financial tools and services
Financial products like credit cards or business loans may leave out the unbanked or underbanked—forcing them to use inconvenient and costly payday lending, check cashing and remittance services.
Mastercard is working to dramatically reduce the cost and access to financial products for Black families with a collection of digital services being offered first through African American-owned fintech MoCaFi.
The digital Mastercard Money Connect Solutions will allow people to send money to relatives affordably; enable real-time bill payment and check deposits by phone; and help people manage wage fluctuations and unexpected bills through earned wage access instead of having to wait until payday.
Capital and resources for Black-owned businesses
Mastercard will expand its relationships with Community Development Financial Institutions (CDFIs), including Accion Opportunity Fund and the Community Reinvestment Fund, to increase capital availability in minority communities.
Mastercard has helped direct $250m in capital flow to Black-owned small businesses in the U.S. since 2018 and is working to triple that amount through this effort.
The company is also investing directly in Black- and minority-led startups and expanding its work with Black-owned goods and service providers.
Also, in collaboration with the National Urban League, the Mastercard Centre for Inclusive Growth is fostering job creation and economic opportunity through the development of Entrepreneurship Centres and Workforce Development Pathways.