Alliance Looks to Make Financial Inclusion Goal a RealityBy Tory Jackson | Fri, 07/15/2022 - 11:00
Galileo Financial Technologies and Mastercard come together to change the lives of consumers and SMBs in Latin America through the digitization of financial services at all levels.
While cash is still king in Latin America, there’s little doubt that digital payments are rapidly taking hold as the digital payment ecosystem matures and grows. It’s estimated that at least 50 million people in Latin America made digital payments for the first time in 2020. The trend continues in 2021, according to the most recent New Payments Index 2022, which shows that 86 percent of consumers in the region used at least one new form of payment last year. Fostering the evolution of payments and the reduction of dependence on cash is at the heart of a powerful alliance between Mastercard and Galileo.
The New Payments Index, a yearly Mastercard survey, reveals that the COVID-19 pandemic produced a great step forward for digital payments and formal banking among Latin Americans but without continued support for the evolution of the ecosystem there’s a danger of losing the progress gained to date. An integrated effort focused on providing physical and digital payment methods for consumers must be complemented with the expansion of terminals in SMBs. Put quite simply, if consumers can’t use their cards to pay for goods and services, they will naturally continue to depend on cash transactions.
The importance of SMBs, which represent more than 99 percent of Latin American companies, and 25 percent of the region’s GDP, cannot be understated. That’s why the Galileo Financial Technologies and Mastercard alliance is so significant in its potential to transform the concept of financial inclusion into practical, convenient and accessible solutions for consumers and businesses.
The combination of Mastercard's developer approach with Galileo's scalable platform provides traditional players and innovators with the infrastructure and technology to create solutions that fit with the realities of everyday life in the Latin America region.
This alliance, which was initially implemented in Mexico but quickly expanded to Colombia, has significant growth and penetration potential not only for these two countries but, shortly, for the entire region.
Latin America is one of the most dynamic regions in financial innovation largely because of the phenomenon of leapfrogging, which is so common in emerging markets. The “latecomer advantage” puts emerging markets in a privileged position as they are not locked into the existing systems and can leap directly to more modern and efficient payment systems.
Given that access to the internet and mobile telephony in the region reached almost 70 percent in 2021, according to GSMA, the gateway for providing innovative financial services for Latin Americans is already operational and ready to serve consumers and businesses at all levels of the pyramid.
The Galileo-Mastercard alliance is the bridge that connects Latin American consumers and businesses with everyday solutions that authentically offer an alternative to carrying, storing and transporting cash.
With more than 20 years of experience in the international market, Galileo provides the backbone for innovative solutions for more than 100 million users throughout the payment chain and makes financial inclusion a reality in Latin America. Mastercard, for its part, is the preferential partner of fintechs in the region to lead the 200 million Latin Americans still unbanked toward the digital economy.
Galileo is a member of the Mastercard Partners Network for Latin America and the Caribbean, one of the components of the Mastercard Developers Program, which provides fintechs in the region with the services and tools they need to grow. Through Mastercard Developers, innovators gain access to applications, platforms and partnerships that enable them to bring their ideas to life and accelerate the digitization of payments.
An alliance is successful when it works for the whole ecosystem, Galileo’s and Mastercard’s brand recognition drive confidence among consumers and businesses. Our alliance allows financial inclusion to move from a lofty goal to an everyday reality.
(In collaboration with Thiago Dias, Vice President of Fintech & Enablers at Mastercard)