International payments solution provider Mastercard has pioneered the Mastercard Cross-Border Services technology which, it said, will help banks in the Caribbean modernise and maximise their global payments business so as to deliver an experience for people and businesses that is secure, seamless, and certain.

The technology was pitched to the Caribbean Association of Banks Inc (CAB) earlier this year as a means to provide both the unbanked and underbanked in the region access to modern financial services, allowing them to enjoy the benefits of the digital economy and affordable payment experiences. As a result, Mastercard and CAB signed a memorandum of understanding on March 24 geared towards enabling intra- and inter-regional payments while expanding financial inclusion in the Caribbean.

The MOU will see Mastercard leveraging the technology, resources and expertise for CAB members to incorporate the solution into their product offering. At the same time, the payments service provider will share its knowledge and educational platforms with the banks to raise awareness among citizens and small business owners on the benefits of Mastercard Cross-Border Services service and other digital financial tools available.

“We are thrilled to enter into this partnership with the Caribbean Association of Banks Inc, which will drive the region’s digitalisation and offer customers across various sectors, including consumers, SMEs, government agencies, B2B, and commercial entities, a safer, easier, and more convenient way of transferring money across borders. The knowledge and data we will leverage from this collaboration will enable us to advance financial inclusion and stimulate economic growth in the Caribbean region,” Mayra Vivacqua, cluster lead for Mastercard Caribbean, explained.

Moreover, Mastercard said the partnership with CAB reflects its commitment to offering solutions that respond to specific market needs, which redound to the benefit of people in the Caribbean.

With Mastercard Cross-Border Services, banks can offer their customers international payments and money transfer in more than 60 currencies to over 100 markets covering 90 per cent of the world’s population. Payments and international payments can be settled in 10 minutes.

“By connecting the entire ecosystem of banks, money transfer operators, mobile network operators, and mobile wallet providers, Mastercard Cross-Border Services creates a more efficient and less costly experience for banks while enabling a better end-user experience,” Mastercard told Jamaica Observer.

“The service offers users flexibility in how they pay by delivering funds to bank accounts, mobile wallets, cards, and cash payout locations with full transparency and predictability over transaction status and delivery time. With Cross-Border Services Express, financial institutions can now get to market faster, reduce transaction risk, and deliver the modernised payment experience that consumers and SMEs seek when making international payments,” the company further outlined.

The payments technology company also believes that the platform can accelerate intraregional and inter-regional trade, pointing to its Mastercard Borderless Payments Report 2022 which showed that since the COVID-19 pandemic businesses, including SMEs, have in integrated e-commerce and digital payment solutions to stay afloat.

“Many shifted their focus to international sales to compensate for business lost closer to home. These often meant onboarding suppliers in other countries, a tactic that helped companies expand in new areas and eased the tension on businesses’ supply chains overall,” Mastercard highlighted.

“Now, SMEs aren’t giving up their new cross-border customers or the suppliers who’ve helped them build and maintain their businesses. Cross-border payments will be critical to supporting both,” it continued.

To this end, Mastercard touts the service as a solution for businesses to improve and expand their cross-border payments strategy while remaining competitive. Some of the benefits it lists are: increasing revenues and profitability, helping to modernise the customer experience, improving the efficiency of payment delivery, and reducing the risks involved in global payments.

On that note, the Caribbean Business Report enquired about the platform’s ability to alleviate de-risking of correspondent banking relationships. De-risking refers to the move by financial institutions to terminate or restrict business relationships with other financial institution based on the perception of exposure to risks such as money laundering and terrorist financing.

While noting that the services offered will be regulated by central banks and monetary authorities across the region, Mastercard pointed out that transaction security is part of its DNA.

“We’ve applied our cybersecurity principles to protect our payment network, implementing the most advanced tools to create a simple, secure, intuitive, and low-friction consumer experience,” the payments solutions provider said.

Commenting on the partnership between Mastercard and CAB, Wendy Delmar, chief executive officer of CAB, underscored the timeliness of executing the MOU given “the immense challenges faced by the region, concerning intra-and interregional payments, primarily as a result of the onslaught of de-risking activity.

“This is certainly a step in the right direction and exemplifies the tireless efforts of the CAB to identify innovative solutions to the challenges of present,” she said, adding: “The CAB acknowledges the increasing costs and complexity related to the transfer of funds among jurisdictions and is pleased to provide an option to the public via our member banks that is cost efficient and underpinned by the adoption of technology.”