Q&A: Incentivizing multinationals to reach 'the last 500 feet'

Last mile populations, or “quite frankly the last 500 feet in some cases,” continue to be left behind when it comes to accessing basic services. That is according to Tara Nathan, executive vice president for humanitarian & development at Mastercard, adding that multinational corporations, and their ability to rapidly innovate, have the power to change the status quo if they can be engaged in the right way.

“In lieu of asking and making calls on, or demands of, the private sector in a purely philanthropic capacity — asking for dollars — how can we engage them and tap into the expertise of getting the best and the brightest to do what they do best?” Nathan asked.

Getting this right, she said, could be key to tackling the deficits many in the world are experiencing in terms of access to food, health care, and financial services. 

“It's not that the food, the vaccines, and the credit doesn't exist, but it's that the access to these services is limited for the world's poor,” she said. “These communities are analog: 60% live offline, 40% have no form of identity, and there's limited or no last mile infrastructure, which drives up the cost to serve and acquire consumers for service providers.”

This is where private sector expertise can be leveraged to solve such problems, Nathan added.

As an example, she cited Mastercard’s Community Pass, a shared interoperable digital platform that connects people in the most remote and underserved communities to service providers including banks, governments, and health care providers.

Community Pass creates a unique digital identity for each individual user and stores this digital identity securely on a card, which enables the individual to use the card to access critical services provided by multiple service providers — such as banks and NGOs — on the platform. With the ability to work offline as well as online, Community Pass has reached over 3 million people across six countries as of January 2023.

In a conversation with Devex, Nathan explained what incentivizes multinational corporations such as Mastercard to tackle global challenges, why it’s not a case of global versus local, and the lessons Mastercard has learned on its Community Pass journey.

This conversation has been edited for length and clarity.

What problems is Mastercard hoping to solve with the Community Pass?

I think we've heard a lot about the power of digital and how digital [technology] can actually streamline access to critical services, but why hasn't it met these communities? And why hasn't it solved this key challenge? It's because digital infrastructure [does] not work in communities where most of the world's poor live.

That's precisely the problem that Community Pass seeks to solve; to build digital infrastructure that provides individuals a functional digital identity and enables access to service providers such as banks, governments, and NGOs who are seeking to provide them services.

If I take an example of an ag-tech in India, their whole job is working with local farmer producer organizations and local buyers to enable smallholder farmers to get access to buyers. Currently, those ecosystems are 100% analog. By partnering with Community Pass, they've been able to digitize that ecosystem so that now a farmer has access to not one or two buyers, but myriad buyers. We've seen the ability for that farmer to earn almost 20% to sometimes 50% more because they're able to post their produce on time, access a broader range of buyers, increase their throughput, and lower their post-harvest loss.

Previously, farmers were invisible to financial institutions. They had to resort to local community lenders and were sometimes paying somewhere between 35-60% annual rates to get access to credit. Now, because we've lowered that access cost, we've created visibility to the farmer's lendability, so financial institutions that are eager to lend to the farmers are able to do so.

What makes an organization such as Mastercard uniquely positioned to build this kind of digital infrastructure?

Every year, we authorize billions of payment transactions. We also build and implement best-in-class data privacy and protection and infrastructure for all of our products, but also for those of all the partners and the participants that operate within the ecosystem.

What we're doing with Community Pass is extending that capability; the thing that we do every single day for billions of transactions, but to reach the most rural populations by extending that infrastructure to work offline.

Why would Mastercard be best placed to provide that accessibility versus companies located in these rural contexts?

There is a great deal of emphasis in the development community on local organizations and local entities. But for me, we shouldn't be saying either or. It's not Mastercard or local. Both have their core competencies, and both need to bring those core competencies together. I wouldn't say it's even both. In fact, it’s all of the above. It's the local private sector, it's the global private sector, it's local NGOs, it's global donors, it's all the actors that need to come together and play to their strengths.

Global entities like Mastercard are about scale. You take the largest ag-tech or the largest healthtech in Africa or in India; when they're boasting their scale success, they talk about maybe a million users. When you're talking about a large-scale company like Mastercard, we operate and optimize for billions. I think that's the key. When you bring in global players, they have a global brand that they're enforcing. They have a value proposition that is not only at scale, but is sustainable, and has demonstrated that ability at scale.

What challenges have you faced in the implementation of the Community Pass that other multinationals might face?

There needs to be equal attention to building out the last mile physical infrastructure, that's agent networks, so that everyone — whether it's NGOs, governments, private sector, global or local — can access it. If the global donor community can partner together with the private sector to build, accelerate, and grow that last mile infrastructure, that would be a great benefit to all.

The other key challenge that’s not talked about enough is that there seems to be a concerning trend around localization regulations that mandate that data must reside or be processed on soil. In fact, what we find is that these localization regulations often end up limiting access to critical services and creating the risk of an adverse impact on consumers and on innovation. Private sector companies are reluctant to enter markets where these data policies put up barriers to operation and growth. We need to be very mindful of that. And from a private sector standpoint, businesses need to recognize the drivers behind these policies and serve as a partner to governments, regulators, and customers.

What would be your call to action for the global community?

We believe that through doing what we know best, we can actually make the world a better place. I think the private sector writ large has the same capacity to do this; to leverage their core competencies, to actually lend their capacities to improve the lives of those underserved or those less fortunate. I think what we need to do, as a global community, is take a more intentional approach to attracting, to incentivizing the private sector, global and local, to play a bigger role.

Learn more about Community Pass here.