Mastercard Partners Up To Advance Digital Economy Via Financial Inclusion

While the third round of stimulus payments have been steadily pouring into bank accounts across the country, there are still a portion of Americans who have not received their much-needed funds.

Some of that is simply a timing issue. The government is due to disburse 17 million direct deposits, 15 million checks and 5 million debit cards, according to the IRS said in a press release, and that takes time. But the delay could also come from the fact that many Americans simply don’t have bank accounts into which payments can be deposited or that they haven’t filed a tax return in years, and so the government doesn’t have accurate address information.

Mastercard has announced that it is working with tax-prep service Liberty Tax to help both issues, according to a company press release. The arrangement provides new Liberty Tax customers a 30 percent discount off tax preparation fees, a $15 bonus, and another $15 credit if filers choose to take any tax refunds on a prepaid Mastercard.

By encouraging tax filing, Mastercard’s North American President Linda Kirkpatrick said in the release that the company hopes to trigger more stimulus payments — also known as Economic Impact Payments (EIP) — while also bringing more people into the digital economy.

“Millions of Americans have been excluded from Economic Impact Payments because they have either not filed a tax return or shared their payment information with the government,” said Kirkpatrick in the release. “We are highly focused on bringing more people into the digital economy, and this offer is reflective of our commitment. Together with Liberty Tax, we are using this prepaid option to help those who need it the most.”

To further incentivize a shift toward the digital economy for those that may have not yet embraced it, Mastercard has also joined with Walmart to offer $10 bonuses to individuals who deposit stimulus payments to a Walmart Money Card, along with another $20 for a deposit of a payroll or government benefit payment of more than $500 by the end of May.

PYMNTS talked with Mastercard Executive Vice President of North America Products and Innovation Chiro Aikat, who said that relationships with Liberty Tax and Walmart are a cornerstone of Mastercard’s goal of ensuring that the digital economy works for everyone.

“It’s not just about payments or access to funds,” he told PYMNTS. “It’s about creating and enhancing the digital economy, where unbanked consumers have access — not just to funds, but different benefits, assets and services as well. So, for us, that’s the broader mantra.”

Getting Giggy With It

He said other partnerships have helped the company comply with that mantra. For example, Mastercard is working with Branch — a challenger bank that works with employers to help hourly workers grow financially and professionally — to help companies like Domino’s ensure their workers receive same-day, digital payments quickly and securely. This not only provides them quicker access to their funds, as opposed to having to get to a bank or check-cashing facility, it also allows them to begin to build healthy financial habits. This level of access to digital payments also, naturally, opens the world of online shopping to those who may not have had access to it before.

Aikat additionally pointed to Mastercard’s 2020 partnership with Stride, a portable insurance benefits platform for gig workers, as another way in which the company seeks to loop in more people to the digital economy, such as independent contractors.

Mastercard continues to listen to the market and focus on partnerships that allow the company to expand financial inclusion, Aikat said.

“The way we look at financial inclusion is all within the lens of digitizing under the banner of inclusive growth,” he said. “I think we’re making good progress. I think that there’s still ways to go, no doubt. But I think we have the right partners. We have relationships in the private sector as well as the government, and we have the right tools, the right solutions and some very effective strategies to drive those forward.”

To that end, he said three of the key takeaways that emerged from Mastercard’s data from the pandemic year are the trends toward more eCommerce, an emphasis on subscriptions and contactless payments. All of those trends point to the need to offer consumers as much choice in their purchasing methods as possible.

“I think those are all things that are going to stay here as part of the consumer habit in a post-COVID environment, but equally important, it’s about digitization,” he said. “What I mean by that is that it’s about secure access to funds. It’s about how the consumer feels safe, no matter how they shop. And it’s always about choice, right? If I want to use my card, I want to have an experience. If I want to do disbursements, I want to have an experience. So, it’s about safety and security, but at the center of it, it’s about consumer choice — and that’s the message to our customers. It’s about making sure we give the consumers choice in how they want to transact, while keeping the foundation of safety, security and ease common across all mediums. That’s what’s going to really be key as we come out of the post-pandemic environment.”