Mobile technology has enabled financial services in a number of African countries, and MasterCard is working to expand this model by tying it directly to a national identity program in Egypt.
The Purchase, N.Y., card network is working with the Egyptian government's ministry of communications and information technology to develop a program that will link citizens' government ID to a national mobile money platform. The resulting digital ID cards will be issued to about 54 million people and be used to make purchases, send domestic remittances and pay government fees.
"It can show there is a business case for governments to electronify their disbursements," said Jorn Lambert, a group executive for digital convergence at MasterCard. "The people can benefit from having an interoperable system that includes a number of functions."
Salaries and benefits can also be disbursed through the national ID virtual cards. Egypt's government estimates the country has 100% mobile penetration, giving the program a national addressable market. The partnership in Egypt also involves a MasterCard innovation hub, which will be located in Cairo.
The card network did not say how long the Egyptian national rollout would take. MasterCard has tested a similar system in Nigeria with a limited rollout, with the hope of nationwide adoption within a few years. In South Africa, an unrelated national smartcard project which does not include an e-wallet component is expected to take several years.
MasterCard is pursuing financial inclusion projects in a number of countries by using a mix of mobile and prepaid accounts, and at this year's Mobile World Congress in Barcelona announced a partnership with Zimbabwe's Steward Bank to make remittance services available to the bank's 1.5 million account holders. The bank also joined HomeSend, a joint venture between eServeGlobal, MasterCard and BICS that allows consumers to send funds to and from mobile money accounts, payment cards, bank accounts or cash outlets regardless of the location of the sender or recipient.
"The issue with many emerging economies and mobile payment systems is not the infrastructure. That is in place; the issue is often how to get the money into the system," Lambert said.
"This [Egyptian partnership] has not been done overnight there have been hurdles to overcome," Lambert said. "Hopefully, this can be poster child for other countries that want to move in this direction."
The government partnerships can prove useful in converting a cash-heavy emerging market to digital payments, said Tristan Hugo-Webb, associate director of Mercator Advisory Group's Global Payments Advisory Service.
"If [mobile money] is hard to use or slow or suffers from any host of other issues, that could negatively impact future mobile payment use," Hugo-Webb said. "Government use of mobile money establishes a foundation for a wide range of society to interact and use mobile money, which can then spur greater use in other situations beyond government-related activities."
More of these partnerships will likely come about in the future, Hugo-Webb said.
"To date, MasterCard has done a great job on financial inclusion efforts but there is plenty of room for more involvement by the broader industry," he said.