Thousands of U.S. fintech companies are creating disruption in the financial space —but the industry as a whole has faced challenges getting the resources it needs to succeed.
Why it’s important: The coronavirus has accelerated the high demand for digital payments solutions. New financial products, from online investing platforms to all-in-one banking solutions appeal to consumers who are social distancing – and they can help small businesses scale.
- But in order to grow and pilot new products quickly, fintechs often need major financial companies to collaborate with them.
With initiatives like Mastercard Accelerate, which gives fintech firms quick access to Mastercard resources and technologies, fintechs can deliver cutting-edge financial products to consumers around the world.
The background: Among the hurdles that have hampered fintech growth in the past: inadequate staffing and demanding compliance and regulatory requirements.
But the Mastercard resources available through Accelerate can help fintech companies with heavy regulatory lifts, streamline the time it takes for them to bring new products to market and bring to life programs in partnership with the banking ecosystem.
One example: Mastercard’s recent partnership with Branch. Branch is a challenger bank that works with employers to help hourly workers grow financially and professionally.
- In partnership with Mastercard, Branch offers a free, digital checking account and debit card that allows cardholders instant access to their wages, tips and reimbursements via mobile wallet functionality – becoming the first earned wage access technology to offer instant paycheck advances at no cost.
Given the current decline in cash use, Branch is helping companies like Domino’s ensure their workers receive same-day, digital payments of their tips and mileage quickly and securely.
How it works: Branch uses Mastercard Send, a push payment solution that enables pay advances and blends stability with flexibility for hourly workers.
Another example: Mastercard’s partnership with MoneyLion. MoneyLion is characterized as an all-in-one mobile banking experience providing access to over six million Americans.
- MoneyLion and Mastercard collaborate on developing innovative, inclusive products and solutions to better serve their goal of improving financial inclusion.
In partnership with Mastercard, MoneyLion offers its members a diverse suite of premium banking features that provides cardholders with easy ways to borrow, save, invest and earn.
The benefits of MoneyLion’s banking membership include:
- Advanced banking experience for the new now.
- Cash advances with zero interest.
- Credit building that works.
- Personalized financial wellness.
- Contactless payments.
Companies like Mastercard are in a unique position to collaborate with innovative fintech companies to drive better experiences across the financial industry — especially with more user-centric, secure products for consumers.
With more partnerships like these, the potential to drive global innovation in the financial space will be limitless.
What this means: Some traditional financial companies view fintech as a threat, but Mastercard has taken the approach of co-creation to bring much needed changes to financial services. Accelerate caters to the specific needs of each fintech firm Mastercard partners with. Among the offerings:
- Mastercard Engage connects fintechs to technology partners.
- Mastercard Fintech Express helps fintechs launch their programs and expand globally.
- Mastercard Start Path helps later-stage startups scale and secure strategic investments.
- Mastercard Developers gives engineers a host of digital tools to help them build applications.