In 2019, we embarked on a project to explore the future of payments and financial services. Having put the question to senior leaders of our business, we identified a core theme — the frictionless future of payments — comprised of five sub-themes.

Among these sub-themes: inclusive access to money and services

inclusive
/ɪnˈkluːsɪv/ • adjective
  1. including all the services or items normally expected or required
    "with everything included"

  2. not excluding any section of society or any party involved in something

Our hope and expectation for the frictionless future of inclusive access to money and services is that:

  • There’ll be a changing role for banks, opening up opportunities beyond the payment ecosystem.
  • Technology will extend access to banking services for unbanked, underbanked and ‘unhappily-banked’ populations.
  • We’ll accelerate financial inclusion and equality across society so no one gets left behind

Widening access to money and services for people and businesses is high on most governments’ agendas; it’s also one of the hallmarks of Mastercard’s efforts to do well by doing good. Here in the UK, for example, our card switching and settlement solution enables people and businesses to conduct range of card and banking services at any connected Post Office counter. It provides access to money and services for those that live out of reach of a bank branch, and those who prefer not to bank online.

Globally, an estimated 1.7 billion adults remain outside the financial system, but digital payments technologies are increasingly reaching the parts of the world banks can’t. Thanks to phenomenon known as leapfrogging, for example, where developing countries bypass rungs on the traditional development ladder, mobile money has become a key feature of the African financial services landscape.

Its equally as important to widen access for banks and other providers to stimulate competition and innovation in financial services and across the wider digital ecosystem. Efforts including regional and domestic Open Banking initiatives are already coming to fruition with the entry of challenger banks, third parties and alternative service providers — which include likes of Google, Facebook and other ‘big-techs’ — in the payments space.

Open Banking will continue to revolutionise the global financial ecosystem, creating new ways to partner, operating models and service propositions. PSD2 and other Open Banking initiatives are a golden opportunity for retail banks to re-imagine their products and services, and ensure they are fit for purpose in tomorrow’s digital landscape.

Jim Wadsworth, SVP for Open Banking 
“The battle for the customer is no longer just the battle for who uses my product… it’s a battle for access."

Within this new reality, we expect to see a shift towards consumer experiences facilitated rather than orchestrated by finance; where banks play a deeper role in consumers’ digital lives. 

“It’s about striking a balance between a fully-digital economy while also being inclusive for those on the margins.”
Gregor Dobbie, CEO of Vocalink, a Mastercard company

Initiatives like Open Banking are driving innovation at the edges, but it's very important as an industry that we don't leave swathes of society behind. By considering and empathising the needs of different people and markets, we can design future payment solutions that are fit for the context in which they will be used.

Jim Wadsworth, SVP for Open Banking 
“The local dynamics are different… but nonetheless the same underlying needs are there.”

Of course, inclusion isn’t just about access to services. It’s about educating people too: We can’t allow underserved communities, young people and those that have fallen behind the digital economy to be disadvantaged by a lack of foundational literacy. We have to work hard as an industry to help our customers understand these products and services.

In the frictionless future, digital technologies reach off-grid parts of the world. Alternative service providers stimulate competition and new innovations. Financial literacy improves, and payments are truly inclusive. Will your AI assistant be your new best friend?

Join the conversation: #FrictionlessFutureofPayments

Hayden Harrison, Storytelling Specialist, Mastercard

Hayden is reporting daily from Sibos 2019 at vocalink.com/sibos. With an eye and an ear for a story well-told, she crafts narratives on the impact of our products around the world, and also curates our topics.