Doing well by doing good - Corporate Sustainability Report 2017
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Doing well by doing good Corporate Sustainability Report 2017
00 01 02 03 04 05
I NTRO DUC TI O N
CEO letter
Highlights
ABOUT
MA S TE RCARD
Who we are
Our approach
to sustainability:
doing well by
doing good
Sustainability
governance
Stakeholder
engagement
About this report
I NCLUS IVE
GROW TH
Our approach
Partnering with
governments
Technology
for inclusion
Helping small
businesses grow
and thrive
Financial literacy
Data for good
Community
support and
development
I NS PI RE D
WO RK FO RCE
Our approach
Inclusion and
diversity
Attracting and
engaging top talent
Employee health
and well-being
Employee
volunteerism
and philanthropy
E NVI RO N M E NTAL
S TE WARDS H I P
Our approach
Ensuring our
sustainability
Environmentally
conscious solutions
E TH I CAL AN D
RES PO NS I B LE
S TAN DARDS
Our approach
Ethics and
compliance
Responsible risk
management
Innovation and
new technologies
Privacy, data
protection and
safety and security
solutions
Human rights
and responsible
sourcing
Assurance letters
GRI index
0
Updated: January 2019
00
Mastercard’s Sustainability is an ongoing
guiding vision
Sustainability is part and journey. We will always be
parcel of that business strategy. exploring what we can do to
It is based on the fundamental deliver long-term change and
is a world
conclusion that we do well by inclusive growth. Our goal is
doing good. Being a force for to continuously learn from
good and being a purpose- our experience and from our
beyond cash.
driven business is part of what partners about how we can
helps us do well as a company. collectively push assumptions
It helps us attract top talent, and barriers to deliver results
grow our base of customers, beyond what people think is
serve as a problem-solving possible or probable.
It is the road map for our partner to governments and And we’ll always be making
business, promoting growth create brand affinity with trusted connections with
precisely because it addresses consumers and businesses those who can drive action.
society’s needs. A world beyond globally. After all, that is what we
cash is a safer world — Philanthropy plays an do as a network: We create
a world with less corruption important role in doing ecosystems and infrastructure
and more inclusion, a world good, but there isn’t enough that lay the groundwork for
where everyone can contribute philanthropic money in the long-term inclusive growth.
to the global, digital economy world to solve society’s In turn, this drives strong
and where the benefits of that problems in a lasting way. relationships, strong financial
economy are broadly shared. Real change calls for companies results and strong delivery
That’s a healthy economy — to take action: to bring to the of our commitment to our
and everyone thrives in a healthy table their technologies and shareholders, as well as the
economy, including Mastercard. infrastructure, capital and world around us.
creativity and ability to scale Ultimately, that is what doing
solutions. When we do this, well by doing good is all about.
we create a sustainable system
where everyone benefits —
employees, citizens, customers,
companies and governments.
Ajay Banga,
President and CEO,
Mastercard
3
As part of our efforts to build a sustainable and inclusive future,
Mastercard is proud to present our annual corporate sustainability
report. Below are highlights from the full report.
I NCLUS IVE I NSPI RE D E NVI RON M E NTAL ETH I CAL AN D
GROW TH WORK FORCE S TEWARDSH I P RESPONS I B LE
S TAN DARDS
We are dedicated to increasing Mastercard is a global company We believe a world beyond cash Our success is tied in part to the
the opportunity for individuals with a global workforce. We work can be more environmentally trust that people place in us to
and micro and small merchants to create an inclusive workplace sustainable, and we are working deliver our products and services
to achieve financial security that allows us to leverage to make that vision a reality. in the right way. For us, acting
and greater prosperity, with the diverse experiences and • Mastercard is first in the ethically and responsibly is not
the benefits of economic growth perspectives of our workforce. payments industry to receive only the right thing to do, but
shared among all segments • We are committed to gender external validation of our also the right way to do business.
of society. equity and the principle of equal science-based target to reduce • We are guided by our Code
• We have made steady progress pay for equal work. our greenhouse gas (GHG) of Conduct, the cornerstone
toward our commitments to • We are dedicated to recruiting emissions 20% by 2025. of our Ethics and Compliance
reach at least 500 million excluded and developing female leaders, • We source renewable energy for system and the foundation of
people from financial services by and we have increased the 100% of our global operations, our culture of decency.
2020 and to bring 40 million micro representation of women in and 73% of our office space • Data privacy and information
and small merchants into the our workforce and leadership. has earned a green building security are vital to the trust
formal economy by 2021. • We offer our employees certification. that our customers and
• The Mastercard Center for compensation and benefits • We are exploring new, consumers place in us.
Inclusive Growth is pioneering to support their entire environmentally conscious • Innovation is at the heart of
new approaches to philanthropy, experience both personally and solutions that help consumers, what we do, helping us make
including data philanthropy. professionally, and we work businesses and cities lessen transactions faster, easier, more
• In 2018, we committed $500 to provide a safe and healthy their impact on the planet. convenient and more secure.
million in funding to Mastercard’s workplace that enables employees
Center for Inclusive Growth Fund, to achieve their full potential.
the first $100 million of which we
gave in 2018.
“World’s Most Ethical Companies” and “Ethisphere” names and marks are registered
trademarks of Ethisphere LLC. USGBC® and the related logo are trademarks owned
by the U.S. Green Building Council and are used with permission. 4
01 03 ABOUT MASTERCARD
WHO WE ARE
Mastercard is a global
technology company
in the payments sector.
We power payments and
provide products and
services for individuals
and industries all around
the world.
6
We connect and create
trusted relationships among
consumers, financial institutions,
merchants, governments, digital
partners, businesses and other
organizations, enabling them to
use electronic forms of payment
instead of cash and checks.
150 currencies and 210 $5.2 trillion
countries and territories in credit, debit, prepaid
We authorize, clear and settle and commercial
transactions through our core Mastercard-branded
network for our issuer customers programs used in 2017
around the world
65.3 billion transactions 2.4 billion Mastercard-
switched in 2017 and Maestro-
branded cards in use in 2017
Mastercard is a publicly traded company listed on the New York Stock Exchange.
Our headquarters are in Purchase, New York, and on December 31, 2017,
Mastercard and its subsidiaries owned or leased 167 commercial properties.
7
Expanding our
core capabilities: Digital Payments
Our innovation in digital
real-time payments extends our network’s
functions to allow people to pay
payments when, where and how they want.
In 2017, we expanded the • Better digital experiences:
capabilities of our network We’re working to deliver
through our acquisition better payment experiences
of Vocalink, which enables everywhere, on all devices
payments between bank and channels, including
accounts in near-real-time smartphones, wearables
Our core in countries in which its
technology has been deployed.
and Internet of things.
• More security:
business As a multi-rail network, we now We’re leveraging tokenization,
offer customers one partner biometrics and machine-
Our core business is built on for all their payment needs, learning technologies in
our global network. Through our domestically and across borders, our push to secure every
payments-processing network, through cards or direct account- transaction.
we facilitate transactions to-account transactions. • New solutions:
and deliver payments-related We’re developing new offerings
products and services. that meet the needs of people
We partner with banks and businesses, including
and other institutions, which peer-to-peer and business-
issue Mastercard-branded OUR CORE to-business payments.
cards and acquire payment
transactions for merchants.
BUSINESS Security by design
In a typical transaction, IS BUILT ON Security is built into the fabric
our network connects a buyer,
a seller and their banks.
OUR GLOBAL of our entire network. Our focus
on security plays a key role in
Our core products are consumer NETWORK how we design, implement and
credit and debit card programs, manage our systems, products
prepaid card programs and and services, including our
commercial card programs for analytics for fraud prevention
business spending. Our network and detection.
is also expanding to enable
real-time payments directly
between bank accounts.
8
Our other services
Beyond our core network, we’re
Putting our
expanding our offerings of business to work
value-added services that help Loyalty and reward programs
Our brands our partners in the payments We offer a platform that Our people, technology,
ecosystem provide new, better helps financial institutions and data and brand provide the
We provide a wide range of and more secure solutions. merchants provide consumers capabilities that drive our
payment solutions and services, These services are built on our with a variety of relevant success. Our strategy is to grow,
using our family of well-known core competency as a payments benefits and services. diversify and build: to grow our
brands, including Mastercard®, network and our data core business globally, diversify
Maestro®, Cirrus® and Masterpass®. capabilities, and they help us Processing our customers and geographies
differentiate our offerings from We offer our payment- and build new businesses,
our competitors, drive better processing capabilities to including value-added services.
performance from our core customers, including issuers In executing this strategy,
products and diversify
our revenues.
and e-commerce merchants,
to help them plug into the
How we we rely on two principles:
We give consumers, merchants
payments ecosystem. make money and banks choice about the
Safety and security solutions best way to pay, and we
We offer products and services We generate revenues from provide solutions that help
to prevent, detect and respond assessing our customers based our customers meet their goals,
to fraud and cyberattacks and to on the gross dollar volume of rather than offering just one
ensure the safety of transactions activity on the products that piece of the puzzle.
made using Mastercard carry our brands, and from the Our key business assets
products. fees we charge for providing and capabilities also provide
transaction switching and for our greatest opportunities for
Information services other payment-related products impact. Our sustainability goals,
and consulting and services. developed according to our
Mastercard Advisors provides We do not issue cards, overall approach to sustainability,
proprietary analysis, data- extend credit or determine are aligned with and support
driven consulting and marketing or receive revenue from interest each element of our business
services solutions to help clients rates or other fees charged strategy. In pursuing those
grow and deliver value to to account holders by issuers, goals, we’re guided by the same
consumers. nor do we establish the rates principles that help us succeed
charged by merchants’ financial as a business.
institutions in connection with
their acceptance of our branded
products. In most cases, account-
holder relationships belong
to, and are managed by, our
financial institution customers.
9
They started with an
extraordinary act: a donation of
10% of the company’s stock to
create the independent, private
Mastercard Foundation, which
was launched with a mission to
advance financial inclusion and
education to enable economically
disadvantaged young people in
developing countries to improve
their lives.
Since then, our financial
performance has driven the
growth of the Foundation’s
resources: Its assets have
grown to more than $20 billion,
making it one of the largest
foundations in the world.
As our largest shareholder,
the Foundation — and the millions
of people it serves — benefits
directly from the growth in our
value as a company through
quarterly dividends. In 2017, the
Foundation received $100 million
in stock dividends to support
its ongoing efforts.
O UR A PPROAC H TO SU STAI N AB I L I T Y: We are a global company,
DO ING W E LL BY D O I N G G O O D serving consumers in more than
210 countries and territories.
As we’ve grown, we have learned
Our commitment to sustainability grew that sustainability is key to our
success. Our environmental, social
out of a question our Board of Directors and governance initiatives are
asked at our initial public offering in 2006: tied to our performance
as a business.
How can Mastercard serve as
a force for good?
10Sustainability at Mastercard
Putting ethics, data privacy
and security first helps us remain Based on our long-held belief
a welcome partner around that doing good for society Materiality and our focus areas
the world. Promoting growth helps us do well as a company, As our approach to sustainability
across all segments of society our approach to sustainability matures, we are moving
contributes to stability and supports Mastercard’s business from managing risk to seizing
shared prosperity, which drives vision and is aligned with opportunity. Our goals in these INCLUSIVE GROWTH ENVIRONMENTAL
our growth as a payments our strategy. areas include expanding beyond We combine expertise, data, STEWARDSHIP
company. Ensuring that our compliance and reputation technology and philanthropic We understand the importance
workforce is as diverse as our Our vision management to innovation investments to empower of addressing environmental
customers, inclusive of the A World Beyond Cash®. and value creation: moving those working on the front sustainability and have
perspectives diversity brings The Fund will facilitate Our mission from driving cost efficiencies lines of inclusive growth. undertaken a variety of
and inspired by our sense of investment in innovative Every day, everywhere, we to growing revenue and from We bring together businesses, environmental sustainability
purpose, is what drives our efforts to promote inclusive use our technology and expertise making sure we do no harm to governments, academic and protection initiatives
success. And limiting the impact growth in the years to come. to make payments safe, owning our opportunity to lead institutions and NGOs to create targeting our greenhouse gas
of climate change is as essential As we grow, we’re still learning simple and smart. with purpose. new models of collaboration that (GHG) emissions, renewable
for our future as it is for the and our approach is evolving. Our commitment To help determine the priority promote inclusive growth and energy, landfill diversion and
world around us. But sustainability is embedded in We’re committed to being a areas for Mastercard, in 2016 bring shared prosperity. transportation footprint,
Mastercard is integrating our business, and we are looking force for good in the world and we engaged Business for Social while also developing innovative,
purpose into our business for opportunities where our to doing well by doing good. Responsibility (BSR), a global INSPIRED WORKFORCE environmentally conscious
strategy. This allows us to serve capabilities position us to have As a core component of our nonprofit business network At Mastercard, our industry solutions.
as a force for good in the world the greatest impact. strategy, we’re conducting and consultancy dedicated to expertise is strengthened by the
while creating opportunities This report describes where business in an open and sustainability, to conduct a diverse insights from our global ETHICAL AND
for sustainable, long-term we’ve come so far and provides transparent way, advancing materiality analysis. This analysis workforce, which is at the core RESPONSIBLE STANDARDS
business growth — to do well examples of how we are working inclusive growth, building prioritized topics across two of our inclusion and diversity Ethics and compliance are
by doing good. toward a world beyond cash an inspired workforce and dimensions: their influence on strategy. Our dedication to embedded in our core values,
In 2018, in light of recent tax that is more inclusive and being good stewards of our business success and their cultivating an environment for and we take a proactive
cuts in the U.S. and elsewhere, more sustainable. the environment to create importance to our external all employees that respects their approach to conducting business
we reaffirmed our dedication a sustainable future for stakeholders. We also conducted individual strengths, views and in a trusted and transparent
to philanthropy by committing Mastercard and the world a current-state assessment that experiences drives a global and way while meeting the highest
$500 million in funding to around us. helps us understand how we are collaborative culture of inclusion. standards for integrity.
promote inclusive growth managing our priorities, and will We drive innovation at every
through a newly formed continue to update our analysis level of our business and regard
nonprofit entity known as MASTERCARD FOUNDATION over time. it as key to our success. We build
Mastercard’s Center for Informed by this assessment, data privacy and security into
Inclusive Growth Fund. We ASSETS HAVE GROWN TO as well as by our ongoing our products and systems from
seeded the Fund with an
initial $100 million in 2018.
MORE THAN $20 BILLION, engagement with stakeholders,
we focus on four priority
the ground up.
MAKING IT ONE OF THE LARGEST areas, which each includes
FOUNDATIONS IN THE WORLD several topics.
11SUSTA INA B ILIT Y GOV E RNAN C E
Sustainability at Mastercard
is driven from the top by our Within our culture of doing
well by doing good, the senior
Board of Directors and CEO. management team works
cross-functionally across the
organization to support our
global sustainability efforts. In 2017, we designated a
We set public targets and global lead for sustainability
endorse external principles to who is responsible for the
ensure internal alignment and creation and execution of our
drive measurable progress. sustainability efforts, and
For example, in 2017 we became in 2018 Mastercard appointed
signatories of the UN Global our first Chief Sustainability
Compact, and in 2018 we set Officer (CSO). The CSO
reduction targets for GHG collaborates with leadership
emissions that were reviewed across the business to integrate
and validated by the Science sustainability initiatives shared
Based Targets initiative. among business units and
We continue to work toward position them to be enterprise-
creating a comprehensive wide drivers of growth.
approach to sustainability and This position is included under
to articulate our approach in a newly created division led by
a clear and unified manner. the Vice Chairman and President
of Strategic Growth, who
reports directly to the CEO.
WE CONTINUE TO WORK
TOWARD CREATING A
COMPREHENSIVE APPROACH
TO SUSTAINABILITY
12Recognition as
a force for good
Board structure
In 2018, the Committee
Encouraging Corporate
Philanthropy (CECP) awarded
Mastercard CEO Ajay Banga
BOARD OF DIRECTORS
and CFO Martina Hund-Mejean
with the CEO Force for Good
Award in recognition of their
leadership in advocating for
Strategic and competitive Brand and reputational Cybersecurity
Our CSO makes Financial financial inclusion in vulnerable
presentations to the Legal and regulatory CEO succession planning Operational communities and emerging
Nominating and Corporate markets.
Governance committee of The joint award reflected
our Board of Directors. This the importance of both
committee considers issues leadership from our CEO and
significant to the company commitment from our CFO
with respect to corporate social and business units in our
responsibility and diversity pursuit of transformative
initiatives, and any concerns change. Ajay and Martina have
raised by stockholders. Other AUDIT HR AND COMPENSATION NOMINATING AND led philanthropic investment
senior executives present to COMMITTEE COMMITTEE CORPORATE GOVERNANCE and innovative business models
the Board annually on specific COMMITTEE at Mastercard that connect the
areas such as risk management, Financial statement integrity Employee compensation underbanked and unbanked
and reporting polices and practices Governance structure
diversity, our environmental with formal financial services to
initiatives and other topics Major financial and other Non-executive director Legal and policy matters drive economic growth in places
covered in this report. business risk exposures compensation polices with potential significant such as Egypt, Kenya and
and practices reputational impact South Africa. By accelerating
Information security, financial independence in
technology and privacy Succession planning Sustainability and
stockholder concerns more communities, they have
and data protection fostered social progress
Risk management framework that exemplifies impactful
leadership.
Legal, regulatory and compliance
Internal controls
13Stakeholders
We regularly engage a broad range
of stakeholders to ensure that we
STA KE H O LDE R E N GAG E M E N T understand their diverse views and
sustainability concerns.
Among the categories of
Our approach to Mastercard’s key stakeholders are:
sustainability begins with • civil society organizations
engaging stakeholders, both • consumers
• employees
internal and external, to • financial institutions, merchants
and other business partners
assist us in determining our • governments
• international organizations
most material environmental, • investors
social and governance • regulators
issues. Our efforts involve
continuous engagement with WE REGULARLY
consultants, peers, other ENGAGE A BROAD
external stakeholders and RANGE OF
our employees. STAKEHOLDERS
TO ENSURE WE
UNDERSTAND THEIR
DIVERSE VIEWS
14Working to achieve the
Financial sustainable development goals
inclusion
partnerships Our business goals and the
As an integral part of our Sustainable Development
business objectives, we partner
with others in the public and Goals (SDGs) are
private sectors to connect the
underbanked and unbanked to inextricably linked.
formal financial services, and to
drive shared economic growth. Our technology, expertise and approach to partnership
These joint efforts include are helping drive implementation and scale for the global
Memberships product innovation, policy goals, while advancing our mission to create a more inclusive
maker and key stakeholder economy. We have programs in over 60 countries designed to
Mastercard participates in engagement, financial reach the financially excluded in active support of these goals.
a number of sustainability education, philanthropy
membership organizations and academic research.
and peer networks focused Our partnerships include:
on environmental, social and
governance topics, which • Alliance for Financial Inclusion
allows us to learn from other • Better Than Cash Alliance
companies’ sustainability • G20 Global Partnership
efforts and share our own for Financial inclusion
best practices with our peers. • International
Our memberships include: Telecommunication Union
• United Nations agencies
• BSR • World Bank Group and
• CECP other international
• Corporate Eco-Forum financial institutions
• GreenBiz Executive Network • World Economic Forum
• Conference Board
Sustainability Council
• Sustainable Brands
• U.N. Global Compact
• U.S. Green Building Council
150
Report scope External
assurance
Unless otherwise noted, the
information in this report Mastercard did not employ an
covers Mastercard’s global external agency or organization
A B OU T THI S REP ORT operations. Our corporate to audit the contents of this
sustainability report focuses report. However, certain
This report covers
on our efforts in four key areas.
Reporting elements of our external
disclosures have gone through
the 2017 fiscal year, Inclusive Growth: creating
a more inclusive world through
history and external independent assurance.
This includes our calculations
spanning January 1 our products, programs and frequency of our greenhouse gas (GHG)
partnerships. emissions and reduction
to December 31, Inspired Workforce: building
a world-class culture of high-
This marks Mastercard’s first
corporate sustainability report.
targets. The assurance letters
are included in this report
2017. In some cases, performing employees who Previously, Mastercard has on page 95.
innovate using their hearts reported on our commitment Information about our
we include data and minds. and approach to sustainability business and financial
and information Environmental Stewardship:
responsibly managing our
on our website, in our annual
proxy disclosure, Carbon
performance is provided in
our 2017 annual report and
about programs and environmental footprint and
creating environmentally
Disclosure Project (CDP)
and other sources. We plan to
quarterly SEC filings.
Please direct questions on
activities relevant conscious solutions.
Ethical and Responsible
publish corporate sustainability
reports on an annual basis.
this corporate sustainability
report or topics relating to
to our corporate Standards: acting responsibly As we continue our journey our corporate responsibility
and with integrity, guided by of innovation, transformation activities to
sustainability priority the highest standards of and leadership, we regularly sustainability@mastercard.com.
areas that occurred ethical behavior.
In selecting the content for
review our strategy and
approach to corporate
in the 2018 fiscal inclusion in our 2017 report,
we used the Global Reporting
sustainability. This ongoing
analysis helps us to identify
year, as noted. Initiative (GRI) reporting
principles of materiality,
and prioritize the issues of
relevance to our business and
sustainability context, our stakeholders. Our materiality
stakeholder inclusiveness and analysis with BSR and the
completeness. This report was priority areas identified in that
prepared in accordance with process were incorporated in
the GRI Standards: Core option. the approach and content
An index of the relevant GRI of this report.
disclosures can be found on
page 96.
1602 03 INCLUSIVE GROW TH
O UR A PPROAC H
We envision a world in
which people are on the
move — on a path of
shared prosperity. Billions
of people are striving to
make a better and more
secure life for themselves
and their families.
18PROSPERITY SHARED AMONG
ALL SEGMENTS OF SOCIETY
THIS IS INCLUSIVE GROWTH
We believe ambition and
aspiration are universal.
Yet too many people lack
access to the networks and
resources they need to reach
their full potential — whether it We envision a world in which
is electricity, training or financial people are on the move — on
services. a path of shared prosperity.
Mastercard has a vision Whether it’s a farmer in Africa
of a world beyond cash. As a or a gig worker in Los Angeles,
network, our business is rooted financial inclusion is the first
in making connections, and our step toward that vision: It is
vision is about breaking down providing access to the tools
barriers and increasing access. that people can use to manage
This vision guides our strategy their money in a secure and
of financial inclusion — access reliable way, to save and
to the set of tools that enables invest for the future.
people to enhance their financial Helping people use those
security and pursue economic tools, and make the critical
opportunities. progression from access to
usage to security, contributes
to their upward mobility and
a better quality of life.
The result is prosperity
shared among all segments of
society. This is inclusive growth.
19$100 MILLION WAS CONTRIBUTED
TO MASTERCARD’S CENTER FOR
INCLUSIVE GROWTH FUND The cost of cash
Our commitment to inclusive
growth is grounded in a growing
In 2018, we deepened our body of knowledge on the
At the end of 2013, commitment to the mission of high cost of cash — a cost that
Mastercard took an important the Center by creating a $500 keeps individuals, families and
step in this journey by million 501(c)(3) philanthropic communities from reaching
establishing the Center for fund to further promote inclusive their full potential.
Inclusive Growth. The Center is a growth, $100 million of which Cash is expensive to print,
hub of the company’s efforts to we gave in 2018. store and secure. Cash-
advance inclusive growth around Inclusive growth is both based transactions facilitate
the world through thought a business strategy and a corruption, illicit activities and
leadership, data philanthropy social impact imperative. It is tax evasion. For the 1.7 billion
and programmatic support. emblematic of Mastercard’s unbanked people who are
The Center is an independent approach of doing well trapped in cash-only systems,1
and noncommercial entity that by doing good. As more it’s much harder to grow a
harnesses all of Mastercard’s individuals and businesses business, much less safe to save,
assets — our technology, global access the financial system and much more difficult to forge
networks, aggregated and and join the formal economy, a path into the middle class.
anonymized data-driven insights, the economic environment
partnerships, the expertise of our improves. Mastercard thrives in
people and our ability to quickly a thriving economy. There is no
scale solutions — to promote contradiction between pursuing
inclusive growth. At the same our commercial objectives and
time, the insights that come advancing inclusive growth.
out of the Center’s research, Quite the opposite: We are
programs and stakeholder doing well by doing good.
engagement help inform
and shape Mastercard’s
business strategy. 1
According to the World Bank’s 2017
Global Findex database.
20We are committed to bringing
We embrace the opportunity
500 million excluded consumers
We are promoting inclusive
growth by connecting more
to be a force for good in the
world and focus on areas where to become more productive,
into the formal financial system by
people to the vital networks we are particularly well-placed improving financial literacy 2020, and 40 million micro and small
that power the modern to have a positive impact. As a
merchants into our network by 2021.
or using data-driven insights
economy, so that everyone has leader in digital payments, we to support evidence-based
a chance to participate in and work with governments, NGOs decisions for social impact.
benefit from economic growth. and business partners to create We look to unearth promising
When people are empowered the necessary environments models that can be replicated
TO DAY WE HAVE RE ACH E D AN ES TI MATE D
to succeed, families and that move people from financial in diverse communities. We use
communities are better off, and access to usage to security early lessons and pilot programs,
the global economy is stronger. — shifts that will transform coupled with the advice of
the economic lives of farmers, experts, to innovate, build
families, entrepreneurs and and scale.
330 million 7.6 million
business owners everywhere. We are powered by the belief
To support these partners, that when people reach their
we pursue both philanthropic full potential, the positive impact
efforts, led by the Center, is felt around the world. It is people micro and small businesses
and commercial programs that the path to shared prosperity.
generate both revenues and From that wellspring, we have
social impact. committed to bring hundreds
We amplify and promote of millions of people, and tens
the efforts of leaders around of millions of merchants, into
the world who are stimulating the formal economy. through initiatives in over
60 countries
equitable and sustainable At Mastercard, we envision
economic growth in their local a world that is more productive
communities — whether by and interconnected — one that
helping micro-entrepreneurs provides people with greater
access training and services opportunities to succeed.
We recognize how much there This includes programs focused on government partnerships, mobile
is to do, and we’re pushing the technology innovation and support to enable small businesses to
pace of progress to make thrive. But increasing access is only the first step. Once they have
the financial system work access to the financial system, the key is to make it possible for them
for everyone. to use it to pursue greater financial security and economic opportunity.
21“Too many people
are disconnected
from the resources
they need to
survive and thrive.
We can help more people prosper by making it easier
for them to pay and get paid. Over the long term, this
helps commerce and our business. This is why inclusive
growth is central to how we think about investing for the
future. We’re putting private sector capital, ingenuity and
innovation to work, which not only creates a foundation
for Mastercard to operate in new markets and reach
new consumers, but allows us to drive real change for
governments, businesses, individuals and society”.
Mastercard President and CEO,
Ajay Banga
22Our journey 2018
Committed $500 million — including $100 million in 2018 —
to Mastercard’s Center for Inclusive Growth Fund, which will
support initiatives that focus on long-term,
to advance
inclusive economic growth.
inclusive growth
Launched the Mastercard Farmer Network —
a digital platform giving smallholder farmers access
to markets, information and relevant financial services. 2017
2016
Committed to connecting 40 million
micro and small merchants to the formal
financial system through our network.
2015
• Committed to reaching at least 500 million people previously
excluded from financial services by 2020.
• Included in Fortune’s inaugural “Change the World” list of companies
making important social or environmental impacts.
• Launched Mastercard Labs for Financial Inclusion in Nairobi with
2014
support from the Bill and Melinda Gates Foundation to develop
practical and cost-effective financial tools that expand access to
financial products and services and help build stable futures.
• Launched Mastercard Aid in partnership with the NGO community
to enable humanitarian aid with global digital voucher services.
2013
Created the Mastercard Center for Inclusive Growth
to advance sustainable and equitable economic growth
and financial inclusion around the world.
2011
Introduced the Master Your Card community education program
to help consumers and small businesses learn how to get more
from their money by using electronic payments technology.
Created the Mastercard Foundation to advance financial
inclusion and education for economically disadvantaged
people in developing countries. 2006
23Leadership on
financial inclusion
A key milestone of Mastercard’s
force for good agenda came
in 2011 with a Tufts University
research report that detailed Mastercard elevated financial
the material and social costs inclusion on the global stage and
associated with cash. helped transform it from a public
At the time, 2.5 billion people sector concern to a shared model In 2006, at the time of
were trapped in all-cash informal of public-private partnership. Mastercard’s initial public
economies, standing in line We were a founding partner of impact of these efforts, we offering, the company provided
for hours and traveling great the Better Than Cash Alliance in Finance for Development have worked with companies a gift of 10% of its shares
distances to pay a bill, send 2012, and our CEO, Ajay Banga, H.M. Queen Máxima of the in other industries, including to create the Mastercard
money to relatives or retrieve assumed the co-chairmanship Netherlands, called on public- consumer goods, agribusiness Foundation, pioneering a
a government subsidy. Cash of the World Economic Forum’s and private-sector leaders to and garment manufacturers, sustainable, independent
can cost from 0.5% to 1.5% of inaugural financial inclusion address the financial inclusion to extend financial services to model for philanthropy.
GDP, depending on the country, steering committee in 2013. challenge globally through those who need them most: Founded with the mission
and poor countries — where These efforts contributed formal commitments. At the women, rural farmers and to advance youth learning and
cash usage is most prevalent to partnerships across the World Bank spring meetings micro and small merchants. financial inclusion to catalyze
— are the most impacted.2 By development and private- the same year, Mastercard co- To support this work, Mastercard prosperity in Africa,
creating and formally adopting sector communities, including founded the Universal Financial joined the launch of Queen the Foundation’s initial assets
a global focus on financial governments, foundations, Access 2020 initiative to address Máxima’s CEO Partnership for of $400 million have grown
inclusion, we integrated a social financial services and the financial inclusion challenge Financial Inclusion, an initiative to more than $20 billion.
impact objective with a business telecommunications. and made a public commitment to accelerate financial inclusion The Foundation continues
strategy targeting an enormous A critical inflection point came to provide financial services to efforts by growing successful to receive support from
gap in the market. in 2015, when Mastercard helped 500 million unbanked people private-private models such as Mastercard each year through
lead the way from awareness to by 2020. Mastercard’s partnership with dividend payments.
action at the World Economic To improve the global Unilever in East Africa. In 2017, the Foundation
Forum in Davos. Our CEO, regulatory environment’s Since 2011, the number received $100 million in
along with World Bank Group support for financial inclusion, of people excluded from the dividend payments. To date,
president Dr. Jim Yong Kim and Mastercard worked with financial system has dropped the Foundation has committed
the UN Secretary-General’s organizations, including the by nearly one-third, to 1.7 $2.1 billion in programming
Special Advocate for Inclusive Alliance for Financial Inclusion billion. Mastercard is working to and partnered with 135
and the G20. To deepen the lead the way, along with other organizations in over 60
pioneering institutions, and countries, improving the lives
driving progress toward of more than 26 million people.
our goals for 2020 and beyond.
2
MasterCard Advisors’ Cashless Journey
24Digital identity
Globally, 1.1 billion people lack
any form of identification.3
Without an official way to
In late 2013, Mastercard The Center activates Mastercard’s prove their identity, they can’t
core assets to drive action on open a bank account, vote in
established the Center for inclusive growth in four ways: an election, access education
Inclusive Growth to advance or health care or receive benefit
payments. Mastercard has long
sustainable and equitable recognized proof of identity
as a critical priority for the
economic growth and financial 21st century — empowering
individuals and increasing their
inclusion around the world. RES E ARCH
We partner with leading
RES PONS I B LE DATA
PH I L ANTH RO PY
access to rights, services and
the formal economy.
The Center seeks to improve economists and scholars to
translate academic theories
We work with our partners to
develop data-driven insights
In 2017, we jointly developed
and endorsed a set of Principles
people’s access to the networks into concrete actions. that support smart government on Identification for Sustainable
Development, alongside
policy and NGO strategies that
that can increase their advance social good. organizations including the
World Bank, the United Nations
productivity, helping create a Development Programme and
pathway to shared prosperity. the Bill and Melinda Gates
Foundation. In Egypt, we
have been working with the
PROGR AMS E NGAGE M E NT government to link identity
Since its inception, the Center has collaborated with a Through programs such as We connect a community of leaders solutions with payments —
network of leading research institutions and academic business training and digital across governments, civil society, enabling people to become
advisors and supported programs that have reached over solutions, we help entrepreneurs academia and the private sector financially included on a massive
350,000 entrepreneurs across 14 countries. The Center is and workers grow and succeed to promote and adopt evidence- scale. See a description of this
also breaking new ground through the practice of responsible in the new economy. based solutions. example under Partnering with
data philanthropy, enabling leading scholars and research Governments on page 27.
institutions to enhance the public’s understanding of the
drivers of economic development and inclusive growth.
See more detail on our Data for Good initiatives on page 34.
3
According to the World Bank’s Identification
for Development 2017 dataset.
25Especially in these places,
challenges with identification
PART N E R I N G W I T H can prevent people from
G OVE R N M E N TS accessing not just essential
financial products, but basic
rights and services. Citizens
In many areas of may lack national identification
the world, essential cards, and governments may
lack tools such as biometric
government services validation that could help them
ensure the right social benefits
require cash payments, are delivered to the right people.
We work closely with
imposing costs and governments globally to help
them deliver the advantages
risks on the people that electronic payments offer
they are intended over cash and checks. Our
solutions not only help more
to help. people easily and safely access
and manage their money, they
also help governments reduce
costs, gain efficiencies and
curtail fraud.
26WE WORK CLOSELY WITH
GOVERNMENTS GLOBALLY
TO HELP THEM DELIVER
THE ADVANTAGES THAT
ELECTRONIC PAYMENTS OFFER
OVER CASH AND CHECKS
U.S.
In the U.S., we joined the U.S.
Egypt Treasury Department and
In Egypt, we partnered with the Comerica Bank to create an
Ministry of Finance and major electronic delivery program
Egyptian banks on a custom providing federal Social Security
solution for the government benefits to U.S. citizens.
to pay its employees safely Through the Direct Express
and efficiently. Launched in program, which launched in
2010, it is now one of the 2008, 5 million Americans
largest government payroll receive government payments
card programs in the world, on a Mastercard prepaid card.
with more than 3 million cards Cardholders can use the card
helping ensure that public- for free at millions of merchant
sector employees receive their locations. They also have
full salary on time. Today, we’re access to tens of thousands of
working with the government surcharge-free ATMs.
to build a mobile money Not only does this program
platform linked to citizens’ cost the U.S. Treasury 90% less
national identification so that all than distributing benefits via
Egyptians can easily participate checks, recipients save at least
in the formal economy. $100 million each year in check-
cashing costs.
27QR payments
While progress has been made,
we know that the cost of point-
of-sale payment-acceptance
devices still prevents many
micro and small businesses
TEC H NO LO GY FO R INC LUS IO N from accepting electronic
payments in both developed
To bridge the gap between and emerging markets.
In 2016, we piloted our
the supply of traditional Masterpass QR digital payment
and acceptance solution to
banking services and the enable customers to use a
global demand for safe smartphone to pay merchants
by scanning a QR code. For
and secure transactions. We work with customers,
merchants, the solution provides
a no- or low-cost way to accept
leading technology companies digital payments at the point
and mobile equipment of sale — even where traditional
manufacturers to develop card payment infrastructure,
products and solutions that or an electric grid, may not be
make mobile commerce and present. In 2017, we expanded
payments simple and accessible. this solution to reach seven
These services allow consumers markets in the Middle East
to pay from any type of mobile and Africa, as well as India
phone, they help merchants and Vietnam.
accept electronic payments
and they help small enterprise
owners run their businesses.
MAKING MOBILE
COMMERCE AND
PAYMENTS SIMPLE
AND ACCESSIBLE
28Mastercard Mastercard Labs for
Farmer Network Financial Inclusion
To drive innovation for social good, we launched
In 2017, we launched the the Mastercard Labs for Financial Inclusion in
Mastercard Farmer Network, 2014 with support from the Bill and Melinda
a digital platform connecting Gates Foundation. It serves as an R&D hub to
smallholder farmers to markets, quickly develop scalable solutions for people
information and relevant who don’t have access to existing payments and
financial services — all powered financial services tools. Building on the programs
by mobile technology. The and best practices of our Mastercard Labs team,
Network allows farmers to Labs for Financial Inclusion develops practical,
sell their produce for the best cost-effective solutions (like the Mastercard
price and quickly receive digital Farmer Network, described on the left) that
payment for their work. Farmers fit local conditions and address people’s needs.
register by providing simple
details, allowing them access
to buyers seeking the produce
they grow and agents who can
transport the harvest from
grower to buyer. Developed in
the Mastercard Labs for Financial
Inclusion, this innovative platform
aims to shorten farmers’
journey from field to market,
carving them a path to greater
prosperity.
To date, more than 18,000
farmers are registered on the
Mastercard Farmer Network, and
our goal is to reach approximately
3 million smallholder farmers in
East Africa and elsewhere.
29H E L P I N G S M AL L
B U S I N ESS ES G ROW
AN D T H R I VE
In many parts of
the world, micro
and small enterprises
provide significant
contributions to local
economies, creating Unfortunately, these
jobs and helping businesses, especially those
in developing countries, often
people build assets face barriers and lack the
tools, knowledge and financial
and wealth that stay services that are available
in their community. to larger businesses.
We deploy our services,
partnerships and technologies
to help small business owners
manage their records, access
market information, build a
financial footprint and use
digital communications
channels to receive training
and business advice.
30Entrepreneurship
training in Indonesia
Another example of how we
help small businesses is through
the Center’s 2017 partnership
with the Commonwealth Bank
Microfinance
in Indonesia. in the U.S.
We are providing high-quality
business training, interactive The Center has supported
digital tools and training the digital transformation
seminars that will impact 15,000 of Grameen America,
Small business women who run micro and small
enterprises. We aim to reach
a microfinance organization
that serves low-income
finance in Kenya 2 million women business owners women entrepreneurs.
by 2020, and we will measure With our support, Grameen
In 2017, we launched a first- the success of the program has expanded its services and
of-its-kind digital lending based on the increase in revenue grown at unprecedented rates,
initiative with Unilever to of targeted small businesses. reaching 97,000 4 women in the
empower small and micro 2017. Grameen is providing the
business owners in Kenya. groundwork to help transition its
This partnership gives members to fully digital financial
shopkeepers access to short- transactions. Now, instead of
term, affordable loans to
purchase Unilever products so
WE DEPLOY checks, members receive their
loans through cards, which
they can stock what they can OUR SERVICES, are safer, give them full and
sell, not just what they may
be able to afford on any given PARTNERSHIPS immediate access to funds and
decrease check-cashing costs.
day. It also provides a tailored AND TECHNOLOGIES
education program that helps
entrepreneurs gain the skills TO HELP SMALL
and knowledge to grow their
business and use the credit
BUSINESS OWNERS
facility effectively. By the end
of 2017, nearly 2,000 shop
owners in the Nairobi area had
enrolled in the program, which
is expanding in 2018 to reach
20,000 stores.
4
Grameen America 2017 Annual Report
31low-income and unbanked
families can instantly become
a part of the global economy
People need to understand by electronically making and
how to use these tools receiving payments, which saves
most effectively to support them time and money. Armed
themselves and their businesses. with this knowledge, financially
FINANC IA L LITE RACY Education on financial literacy vulnerable people can avoid
helps people take advantage expensive financial services and
of the services that come with fight back against merchants
Access to financial products financial inclusion to achieve who abuse them, such as check
and services is not enough greater financial security and
economic opportunity.
cashers and payday lenders.
For small businesses, Master Through Mastercard’s corporate
to create inclusive growth. We develop, lead and sponsor
financial literacy programs for
Your Card provides education
on how to negotiate the best
partnership with the National
Urban League, we educate
consumers and small business deal from card processors people about and promote the
owners around the world. and equipment providers. importance of financial inclusion
A key element of our approach Our program covers key areas and economic empowerment
is our flagship community- that help them gain more value among the league’s
empowerment program, for their business and their representatives from affiliate
Master Your Card, which helps customers, including how to services communities across the
consumers and small business select a card processor and U.S. We intend to expand our
owners in various regions learn equipment provider, negotiate partnership and educate the
how to get more from their the best deal, improve the safety younger members of the affiliate
money by using electronic and security of their transactions chapters about our payments
payments technology. and information, manage their technology — algorithms,
By understanding how to finances and use business encryption, fraud detection,
use payment cards (including technology. data analysis, digital convergence
prepaid, debit and credit cards), Since its creation in 2011, and the power of our network.
Master Your Card has developed The Center for Inclusive
and delivered hundreds of Growth also supports financial
training and capacity-building education for small business
sessions in partnership with owners through programs aimed
governments, chambers at helping micro-entrepreneurs
of commerce, community gain the skills they need to grow
organizations and other groups their businesses.
that support consumers and
small businesses in 15 countries.
32Master Your Card in the U.S.
68 million 10.4 million
I N D IVI D UAL S AN D A S PI RI NG E NTRE PRE N EU RS ,
B US I N ESS ES S MALL B US I N ESS OWN E RS ,
TR AI N E RS AN D M E NTO RS
reached through our established network
of more than 125 influential and diverse reached by Master Your Card’s five national
organizations, including community groups, small business partners and 173 chambers
unions, chambers of commerce and others. and other small business organizations that
receive monthly educational content for
their members.
3.7 million >20,000
people reached through Master Your Card’s S TU D E NTS
national Latino, African-American and
labor union program partners. reached by the end of the 2017-18 school year
through our partnership with the financial
education company Everfi to deliver the
Master Your Card financial literacy program
in 268 public schools.
33Tapping into the expertise of
Data can drive insights that our in-house data scientists, we In 2017, the Center supported
help experts from a wide range have published new data-related research to measure how urban
of disciplines and institutions resources for organizations innovations are improving the We recognize that the power
understand the world’s most committed to positive social way we live, work and connect in of responsible data philanthropy
pressing economic and societal impact and conducted analysis cities. Insights from anonymized will be realized when it is widely
issues and identify effective aided by Mastercard’s data- and aggregated Mastercard practiced. Our efforts to unleash
ways to address them. driven insights to better data enabled researchers from the potential of responsible data
But people, researchers and understand trends affecting New York University’s Center philanthropy are not limited to
organizations that lack data- local economic activity. for Urban Science and Progress our own initiatives. We know
related resources are excluded Mastercard’s data-driven to study how different services that the need is great and the
from this potential. The Center insights have helped to better in New York — such as bike- pace of progress in this effort
is pioneering the practice of understand the economic impact sharing and interactive kiosks must increase; responsible data
responsible data philanthropy of the more than $200 million in offering resources like free Wi-Fi philanthropy initiatives must
to harness the power of data- recent redevelopment spending and device-charging stations — be nurtured. That’s why we’re
driven insights to advance in Chicago’s historic Pullman may be benefiting commuters, engaging with global leaders,
DATA FOR GOOD social good. neighborhood. 5 Using our own visitors and local businesses. academia, nonprofits and NGOs
Subject to robust privacy anonymized and aggregated Also in 2017, the Center to identify and create incentives
Mastercard recognizes the and data-protection controls,
the Center allows institutions
transaction data, Mastercard
analysts compared spending
published two editions of
Donation Insights, an open-
to participate in responsible
data philanthropy and to foster
power of data to transform focused on promoting positive
social impact to leverage
and retail trends in Pullman to
citywide trends, demonstrating
source report and data set
that shed light on charitable
broader engagement. Through
our leadership in responsible
communities and change its data-driven insights and that redevelopment investments giving trends. With more than data philanthropy, we hope to
data expertise. We work with spurred a more significant five years of monthly indexed bring together the resources
lives for the better. leading scholars and academic impact beyond the citywide insights, Donation Insights necessary to realize the power
institutions to conduct research effects of the economy allows charities and nonprofits of data-driven insights to create
and leverage our data-driven improving. For instance, to have a better understanding sustainable, lasting solutions to
insights to guide evidence-based we found that the number of the how, why and when of society’s greatest challenges.
solutions and policy making. We of cardholders in Pullman charitable giving.
have also helped NGOs improve more than doubled since the
their capacity to work with their development began, showing
own data-related resources. greater financial engagement
These efforts empower in the neighborhood. And digital
nonprofits, researchers, NGOs payments grew by 86% between PIONEERING THE PRACTICE
and city and regional planners 2012 and 2016, while Chicago
to more efficiently identify as a whole saw only 17% OF RESPONSIBLE DATA
challenges, determine ways to
address them and take practical
growth. Insights like this help
facilitate greater investment
PHILANTHROPY TO
steps to solve them. and demonstrate the impact HARNESS THE POWER OF
5
Chicago Neighborhood Initiatives’
of inclusive investments
throughout a city.
DATA-DRIVEN INSIGHTS TO
“Pullman Revitalization” website ADVANCE SOCIAL GOOD
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