How Mastercard is driving financial inclusion in the Middle East

From implementing artificial intelligence to advancing FinTech, Mastercard is rapidly evolving the very concept of financial inclusion and innovation.  Khalid Elgibali — who is the chief operating officer for the eastern Europe, Middle East, and Africa region at Mastercard — tells us how and why Mastercard is bringing its payment technologies to more people than ever before in the Middle East and beyond.

Card payments have come a long way ever since their origins in the late 1940s, when several US banks started issuing their customers specially issued paper that could be used like cash in stores. By 1966, this had evolved into card payments becoming more widely accepted.

Mastercard was part of this journey from the very beginning as the company evolved from the Interbank Card Association (ICA) to becoming ‘MasterCard International’ in the 1970s. Since then, being international has been at the core of Mastercard’s operations. According to the company’s full year 2023 financial results on the New York Stock Exchange, there were 3.3 billion Mastercard and Maestro branded cards in circulation around the world for the period.

The Middle East region is one of the key growth regions for Mastercard that shows immense potential for the future. Khalid Elgibali is the chief operating officer for the Eastern Europe, Middle East, and Africa (EEMEA) region at Mastercard, and in an exclusive interview with Gulf Business, he tells us more about how his company is innovating when it comes to cross-border and digital payments, his take on the growing adoption of instalment transactions, and how his company is navigating its various collaborations and initiatives in the region.

He also gives us insight into Mastercard’s interesting tie-ups with tourism industry players, its artificial intelligence and cybersecurity initiatives and, finally, its fintech partnerships.

Cross-border opportunities, digital inclusion

The region’s digital payments landscape is evolving rapidly, with one of the main opportunities being the rise of cross-border payments, says Elgibali. “The region is home to a large expat population, for many of whom cross-border payments are a vital way to stay connected to their communities.”

Research is backing this up. According to Mastercard’s 2023 Borderless Payments Report, 48 per cent of respondents in the UAE and 43 per cent in Saudi Arabia said that they expected to send cross-border payments more frequently over the next 12-month period.

Meanwhile, 36 per cent of respondents in the UAE and 40 per cent in Saudi Arabia said they are likely to receive more cross-border payments during the same period. Here, Elgibali highlights how Mastercard Cross-Border Services facilitates the movement of funds to any end point across over 180 countries through one secure connection, thereby reaching 90 per cent of the world’s banked population. But it’s not just cross-border payments that Mastercard is focusing on in terms of digital opportunities.

Another key area for the company is the growing popularity of installments that allow shoppers to convert their purchases into several interest-free payments with no processing fees.

“People appreciate the flexibility and convenience of the solution, but also want the added sense of security associated with a trusted provider, like a bank or a payment network,” explains Elgibali.

“The Mastercard Installments programme marked its debut in the EEMEA region with the launch of the SlicePay card in collaboration with First Abu Dhabi Bank under its Dubai First Framework.

This was followed by the large-scale partnership with Network International that will expand the reach of the solution even further across the UAE. In Saudi Arabia, we joined forces with Saudi National Bank (SNB) to introduce the Flexi Card, which is also powered by Mastercard Installments,” he says.

In terms of other key digital transformation initiatives, Mastercard recently inked a long-term strategic collaboration agreement with Areeba, a leading regional payment processor based in Lebanon, to bring new Card-as-a-Service (CaaS) and Bank-as-a-Fintech (BaaF) propositions to the market.

As part of the collaboration, Mastercard is helping to provide innovative products and services to banks, fintech companies, and non-banking financial institutions by building ready-to market CaaS hubs in selected Arab countries, spanning from the Levant to North Africa.

Interplay with AI

Amid services such as OpenAI’s ChatGPT bursting onto the scene in late 2022, Mastercard already has a long history of using artificial intelligence. Elgibali acknowledges that AI, computational power, and data technology are converging to propel this trend forward.

“AI enhances data analysis and decision-making, while computational power enables faster AI training and inference. Spatial computing benefits from AI-driven object recognition, and data becomes more valuable as it feeds into AI algorithms,” he says.

“At Mastercard, we are tapping into the potential of emerging technologies, like AI, machine learning, 5G, edge computing, biometric recognition as well as virtual and augmented reality, to enhance solutions already available today. Building on our shared commitment to innovation, we initiated a landmark strategic partnership with FAB, focused on delivering unique and disruptive digital products, services and solutions across the UAE, Saudi Arabia, Oman, and Egypt,” adds Elgibali.

“At Mastercard, we aspire to become an AI powerhouse with our products and services, that’s why we are ramping up our investments in AI governance, technology, and talent. We have been using AI for more than 10 years, and today, it is critical to the solutions we provide to our customers. For example, it allows us to protect the over 150 billion transactions that we process on our network every year at speed and scale. In fact, our AI-powered solutions have saved $35bn in fraud in the past three years,” he explains.

He underscores how Mastercard’s customers leverage the payments firms’ analytics and advisory services for AI expertise, such as thought leadership and custom AI engagements. “We embed AI features and capabilities into our data and services offerings, developed by more than 2,000 data scientists, analysts, and engineers.

“To enhance AI capabilities and readiness in the region, we opened the Centre for Advanced AI and Cyber Technology in Dubai in partnership with the UAE Artificial Intelligence Office,” adds Elgibali.

He further notes that the cutting-edge AI solutions developed at the centre help Mastercard to detect cyberattacks, data breaches, and fraud, making the digital ecosystem safer for governments, banks, merchants, and consumers.

Tourism opportunities

Tourism and travel have experienced a dramatic uptick post-Covid as countries have reopened their borders. Dubai International Airport, for example, achieved a remarkable turnaround in 2023.

Not only did it surpass pre-pandemic passenger traffic, but it also exceeded its yearly forecast, welcoming 86.9 million travellers, more than the 86.4 million figure achieved in 2019. This 2023 number marked a 31.7 per cent surge compared to 2022. This healthy picture extends to the rest of the region too.

“MENA is the only region to show a 22 per cent increase in tourist arrivals above 2019. Turkey, Egypt, Tunisia, and the UAE were among the top 10 fastest-growing destinations for European travellers in 2023,” says Elgibali.

“At Mastercard, we are committed to connecting people to their passion for travel by working with leading industry players to co-create innovative solutions tailored to travellers’ needs. A prime example is our two co-branded cards with Emirates NBD and Marriott Bonvoy that offer a curated selection of personalised travel and hospitality benefits.”

SME Focus

As part of its push to build out financial inclusion, Mastercard has pledged to bring one billion people and 50 million micro, small, and medium enterprises (MSMEs) worldwide — with a focus on 25 million women entrepreneurs — into the digital economy by 2025.

“In Saudi Arabia, we collaborated with Saudi Awwal Bank to introduce an SME Business credit card, which aims to transform SME lending. It enables businesses to gain easy access to credit, pay their suppliers faster and optimise their cash flow,” says Elgibali.

“In Pakistan, we partnered with the Bank of Punjab and Pakistan Software Export Board to launch the Mastercard Freelancer Digital Account and Card that helps freelancers and IT professionals access global services and receive payments from over 210 jurisdictions,” he adds.

In addition, the company joined forces with Aramex and the UAE Ministry of Economy’s ‘Entrepreneurial Nation’ to launch the ScaleUp platform with the aim of supporting SME growth in the country. ScaleUp presents an opportunity for startups and SMEs to pitch innovative ideas for a chance to win Dhs250,000, meet with angel investors, and gain several other benefits.

Its latest initiative in the SME space is its partnership with Abu Dhabi Global Market aimed at fueling the growth of the sector by digitising SME payment flows. “We also recognise the crucial role women play in advancing innovation, sustainable development, and social progress. As part of our financial inclusion objectives, we pledged to equip 25 million women entrepreneurs worldwide with the tools and resources they need to grow their businesses by 2025, and we achieved our goal in June 2023,” shares Elgibali.

“Last year, we partnered with the international organisation Women Choice to establish the Social Innovation Incubator for Women’s Employment. Together, we seek to create one million jobs for women across the Middle East and Africa in the next five years,” he adds.

Fintech Advancements

From a fintech perspective, Mastercard considers itself “the original fintech”, notes Elgibali. More particularly, the company views itself as a key enabler and partner in helping fintech companies get ahead.

“We provide the services and tools that fintech innovators need at every stage of their journey. We empower them to transform their bold ideas into reality and achieve scale at pace,” says Elgibali. Among the examples that Elgibali refers to is a strategic alliance with HyperPay, which is the fastest-growing payment gateway in the MENA region.

“We are developing cutting-edge solutions that empower businesses, governments, and SMEs to shift from cash-based payments to a seamless digital ecosystem,” he says.

Mastercard has also partnered with Loop to bring innovative payment methods to consumers and businesses in Saudi Arabia. In Pakistan, it joined forces with digital wallet provider JazzCash to revolutionise digital payments by introducing affordable acceptance solutions in that country. The company further signed an MoU with Fintech Saudi in 2023 to advance the growth of the kingdom’s fintech ecosystem.

The global payments major also has an ongoing strategic partnership with Dubai International Financial Centre in the fintech space in the UAE.

In Qatar, the company has joined forces with the Qatar Financial Centre Authority to explore the creation of a Fintech Innovation Lab catering to financial institutions, fintech players, and other financial services companies.

Finally, in Egypt, it hosts the annual Fintech Industry Retreat in partnership with GIZ Egypt and El Rehla and under the patronage of the Central Bank of Egypt, FinTech Egypt, and the Financial Regulatory Authority.

Now in its fourth edition, the event convenes the country’s fintech community to explore opportunities to enhance the fintech landscape. The ecosystem thrives when fintech companies have access to the tech they need to scale and grow further, adds Elgibali.

Bolstering cybersecurity

Cybersecurity has become another key focus area for Mastercard as it has sought to safeguard digital payments. Interestingly, here, the innovative technology is helping Mastercard to fend oƒ cyber threats.

“We are securing the entire payments ecosystem with end-to-end encryption, tokenisation, and authentication. We work with our partners to develop innovative cybersecurity solutions, powered by advanced identity and AI technologies. McKinsey estimates that AI could potentially deliver up to $1tn of additional value each year,” says Elgibali.

In recent times, Mastercard has also acquired several companies with industry-leading AI capabilities, such as Brighterion, RiskRecon and NuData, that enable it to boost its cybersecurity offerings.

“In the Middle East and Africa, we are collaborating with Network International to provide our Brighterion AI technology to 60,000 merchants across the region,” Elgibali says.

The company recently initiated an AI-driven in Saudi Arabia in partnership with SAB that leverages Mastercard Gateway’s advanced Transaction Risk Management technology to deliver safe and seamless digital transactions.

As Elgibali closes out, he highlights that “AI is fast becoming one of the greatest game changers of our time, reshaping the way we handle our fi nances, conduct business and interact with the global economy.”

“The next decade will be a defining one, with all our established systems intersecting with AI. We have already mentioned its unparalleled cybersecurity capabilities. “And finally, AI-driven insights can help companies uncover whole new target customer segments, identify gaps in their offerings, solve business challenges, optimise processes, and drive efficiencies and cost savings.”

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