How Mastercard plans to get informal traders to bank for the first time

Mastercard's Division President for Sub-Saharan Africa, Raghav Prasad, is on a mission to revolutionize the digital banking landscape across the continent. His goal is not only to move away from the dominance of cash transactions but also to encourage millions of informal traders, who have traditionally operated outside the formal banking system, to start utilizing banking services for the first time. Prasad believes that the immense potential for growth and development in Sub-Saharan Africa lies in the transition from cash-based transactions to digital transactions. With approximately 90-95% of transactions still conducted in cash, Prasad sees each percentage point shift towards digital transactions as a significant step towards market development and economic growth. The cost of the informal economy, estimated to be between 1.5% to 5% of GDP, underscores the urgent need for digitization and financial inclusion in the region. Prasad emphasizes that the digitization of the economy holds the key to improving efficiency, boosting productivity, increasing tax revenues, and fostering economic growth in various sectors. He points out that despite the challenges, the potential benefits of digital transformation are enormous.