The inequities in today’s financial system have left many Americans without access to affordable services, instead relying on payday lending, expensive cash checking services and remittance fees.
Mobility Capital Finance (MoCaFi), a financial technology, mobile-first banking platform, and Mastercard are partnering to bring alternate financial services to underserved communities with a specific focus on providing tailored digital tools, and new payment cards to low wealth minority and Black communities. Mastercard has now furthered its commitment with a capital investment in MoCaFi.
MoCaFi and Mastercard have been working together via the Mastercard StartPath program, an award-winning startup engagement program a springboard to help later stage startups maximize their opportunity for success. The new investment will enable the expansion of MoCaFi’s card programs and solutions to help address the inequities in the financial system for the underserved and to support the company’s platform to provide banking, credit building, and wealth coaching services to the underbanked. The partners plan to scale their collaboration in cities across the U.S. with view to expanding access to vital city programs such as financial aid and social benefit programs. The team has already launched initiatives in Honolulu to enable critical financial assistance and are supporting universal basic income pilots in Colombia, SC, Newark, NJ and San Francisco, CA.
“As a neo bank focused on closing the racial wealth gap, MoCaFi sees a great opportunity to create market-based solutions that address the structural economic inequality that exists in this country,” said Wole Coaxum, Founder and CEO of MoCaFi. “Social justice without economic justice is like one hand clapping. Mastercard’s investment into MoCaFi gives us the basis to scale our operations and create the impact that we seek to deliver - providing us another hand to serve communities.”
The lack of access to basic financial services means that Black individuals are spending 50 to 100 percent more per month for basic banking services, which, over a lifetime, can cost $40,000 in fees. Partnering with Mastercard, MoCaFi is delivering digital services that aim to close the racial wealth gap and advance Black Americans’ ability to affordably save, invest, and insure themselves against risks. The digital Mastercard Money Connect Solutions will help reduce dependence on payday lending, allow people to send money to relatives affordably; enable simple real-time bill payment and check deposits by phone. The efforts aim to improve the cost and access to essential financial products for Black families in cities and communities across North America.
“Mastercard is leveraging our company resources - everything from our products, services, technology and financial support - to help close the racial wealth and opportunity gap. Partnerships are critical to achieving that goal and we’re continuing to expand our support for and collaboration with Black entrepreneurs,” said Michael Froman, Vice Chairman and President, Strategic Growth at Mastercard. “By investing resources and capital directly in Black and minority-led companies like MoCaFi, we can build the capacity of those with a direct connection to underserved communities and help them to scale. We are optimistic that together we can start to drive the change needed to help everyone reach their potential.”
Mastercard’s investment is part of its $500M commitment to close the racial wealth and opportunity gap in the U.S. Earlier this month the company launched The Strivers Initiative, a campaign dedicated to elevating Black entrepreneurs overcoming obstacles to maintain and grow their business, as role models for the community and future generations, while encouraging consumers and businesses alike to shop, share and support them.