Mastercard extends Smile ID KYC partnership to continue financial inclusion push

A strategic commercial partnership between Mastercard and South Africa-based Smile ID to accelerate the adoption of digital ID in Africa has been extended. The partners believe that digital identity solutions can help reduce fraud and improve financial inclusion on the continent.

The extended partnership also aligns with the goals of the Mastercard Lab for Financial Inclusion, which is located in Kenya.

Smile ID signed on to provide data verification and fraud detection capabilities for integration with Mastercard identity services last year. The partners said at the time businesses could be onboarded with Mastercard’s Merchant Digital Onboarding Program for easier KYC within three minutes.

The renewal announcement notes the integrated tools can also help with AML compliance, preventing synthetic identity fraud, and scale to support cross-border commerce and digital market expansion.

“The surge in synthetic identity fraud in Africa is costing banks and lenders hundreds of millions of dollars a year,” says Mark Straub, CEO of Smile ID. “By joining forces with Mastercard we can help turn the tide. As we combine insights and technologies, we can expand opportunities for consumers by giving banks and mobile wallets the confidence to onboard the next 300 million African users securely, in seconds.”

Mastercard has also taken a minority ownership stake in Smile ID, according to the announcement.

“As fragmented identity systems slow down businesses and lock millions out of the digital economy, Smile ID’s innovative identity platform complements Mastercard’s commitment to fostering secure and inclusive digital ecosystems,” says Selin Bahadirli, EVP of services for Mastercard EEMEA.

A long-term project

The Lab for Financial Inclusion was founded in 2014, as the seventh “innovation hub” opened by Mastercard around the world, and the first in Africa. Mastercard frames it as part of a broader effort to expand its own addressable market by bringing 500 million people excluded from formal financial services into the financial system through partnerships. The lab itself has a goal of reaching 100 million people with “ground-breaking solutions.”

Mastercard says the lab will address financial inclusion both regionally and globally, targeting the agriculture, “micro-retail” and education sectors. The Mastercard Farmer Netowork, which is rolling out in  East Africa and India,

The Gates Foundation has supported the lab from its outset, and committed a grant of over $19 million last November to support the lab. The development group describes the lab as intending to “create products and services that at scale will directly increase usage of digital financial products by poor adults in the ‘Base of the Pyramid’.”

Article Topics

Africa  |  AI fraud  |  biometrics  |  digital identity  |  financial inclusion  |  identity verification  |  Mastercard  |  onboarding  |  Smile Identity  |  synthetic identity fraud