Dive Brief:

• Mastercard is integrating fintech tools from Swedish telecom and networking company Ericsson into its cross-border money movement system, the card giant said Wednesday.
• With the integration, the two companies aim to help telecommunications companies, banks and fintech firms offer more payment services, launch new digital wallet capabilities and connect with unbanked and underbanked communities, the announcement noted.
• The two companies will begin introducing the integration to customers in the Middle East and Africa, because those markets have high consumer demand for mobile money, remittances and interoperable payment services, the release noted.

Dive Insight:

Through the collaboration, Mastercard and Ericsson’s mobile financial services unit will enable companies to build and scale their financial services and create new revenue streams in developing markets, the release said.

Ericsson, the Stockholm-based firm that provides mobile connectivity services, reaches more than 120 million active users and processes more than 4 billion transactions monthly across 22 countries, per the press release. 

“By integrating with Ericsson’s fintech platform, we’re opening new pathways for telecom operators, financial institutions and fintechs to scale innovative payment services, reach underserved communities and unlock fresh revenue streams,” Pratik Khowala, Mastercard’s global head of transfer solutions, said in a press release.

“This collaboration not only meets the rising demand for digital cross-border payments, but also accelerates progress toward a more connected, inclusive and dynamic global digital economy,” Khowala added.

Mastercard’s partnership with Ericsson follows its research into the payment headaches of businesses and consumers in the Middle East, Africa and other markets.

In 2023, Mastercard surveyed small- and mid-size businesses, consumers and gig workers in 15 countries across North America, Latin America, Europe, Africa, and the Asia-Pacific and Middle East regions. Small and mid-sized business respondents cited various concerns with cross-border payments, including becoming a fraud victim, unfavorable exchange rates or transfer fees, transaction cost uncertainty, slow fund transfers and payment restrictions within the destination country.

Mastercard’s interest in the Middle East and Africa region comes as its payment volume from those regions, plus the Asia-Pacific, has grown in recent months. In an earnings release last month, the company reported a 5.6% year–over year increase in gross dollar volume for the fourth quarter in the Asia Pacific, Middle East and Africa region to $657 million. By contrast, volume grew a lesser 4.1% in the U.S., albeit to a higher $825 million, according to the release.