Mastercard created an alliance to mobilize financing to help upgrade transit systems around the world.
As a part of the company’s City Possible initiative, this global program unlocks capital to introduce more efficient ways for residents and visitors to access public transport through technologies such as contactless payments. Launching this initiative first in North America, Mastercard will partner with Meridiam, a world class global investor with deep experience in developing, financing and managing mobility infrastructure projects.
Through City Possible, a partnership and co-creation framework launched last year, city leaders identified access to capital to improve critical infrastructure as one of their biggest concerns. In a survey of around 100 cities worldwide, the London School of Economics found in 2018 that 55 percent of municipalities identified lack of public funding as a major barrier to sustainable urban growth.
“Collaboration is the lifeblood of City Possible,” said Miguel Gamiño, executive vice president enterprise partnerships and head of global cities at Mastercard. “Today’s announcement represents such a collaborative approach that matches cities’ needs with financing resources, our technology, and expertise. This program highlights how even resource-constrained municipalities can benefit from working with the private sector to make the digital economy work for everyone, everywhere.”
Even with significant savings that can be realized through contactless ticketing - by 30 percent or more from more efficient operations - many agencies find it difficult to fund the initial capital outlay due to budget constraints. Earlier this year, the American Public Transportation Association (APTA) put the need for critical public transportation investments in the United States at - at least - $232 billion.
“We are thrilled to work with Mastercard in bringing modern transport infrastructure to more cities to accelerate the deployment of cutting-edge, technology-enabled infrastructure that is more environmentally friendly and resilient,” said Thierry Déau, chief executive officer at Meridiam. “With this initiative, Meridiam will contribute to the development, financing and management of sustainable urban transport infrastructure, improving mobility experiences and unlocking significant savings for cities. This is another example of our profound commitment towards improving quality of life for more people.”
By bringing together Meridiam’s experience in financing and developing public infrastructure projects with Mastercard’s global expertise in digital technology, the alliance will be able to help transit agencies implement smart payment systems and lay the foundation for mobility-as-a-service (MaaS). Over the coming months, Mastercard and Meridiam will identify key cities that are looking to transform their urban mobility systems.
“Modern, resilient infrastructure is critical for anticipated urban growth,” said Sameh Naguib Wahba, global director of the World Bank’s Urban, Disaster Risk Management, Resilience, and Land Global Practice. The global investment needed for urban infrastructure is $4.1 - $4.7 trillion per year, and even higher if made resilient. This figure dwarfs official development assistance and as such calls for the importance of private investment in building and modernizing infrastructure and transit systems.”
Today’s announcement builds on the pioneering work Mastercard has done in assisting hundreds of cities - including London, Bogota, Sydney, Singapore, Dubai and New York. By enabling the cards and digital devices people already carry to access trains, buses, and any other mode of transport, cities provide better experiences to riders.