Mastercard Taps Telecoms for 120M Potential Customers

Mastercard and Ericsson announced a global agreement to link Ericsson’s Fintech Platform with Mastercard Move, allowing both platforms to expand their digital money movement services into telecom-based financial systems.

The rollout will take place in the Middle East and Africa, and bring Mastercard’s network capabilities to approximately 120 million active mobile financial services users.

“Mastercard Move empowers payment service providers to shape the future of money movement — delivering fast, secure and transparent transfers for individuals and businesses worldwide,” said Mastercard Global Head of Transfer Solutions Pratik Khowala.

By integrating with Ericsson’s fintech platform, Khowala said “We’re opening new pathways for telecom operators, financial institutions, and fintechs to scale innovative payment services, reach underserved communities, and unlock fresh revenue streams.”

Ericsson’s platform handles over 4 billion monthly transactions in 22 countries. Mastercard Move has operations in over 200 countries and territories with connections to more than 17 billion endpoints and support for 150+ currencies.

Together they will create a pipeline through which telecom customers — many of whom do not have a bank account — can use global payment rails.

To CardRates readers who focus on prime lending, the larger picture here isn’t just about financial inclusion — it’s competitive advantage.

Banks are responsible for the initial interaction with their customers in the developed world. However, in the Middle East and Africa, it is often the telecommunications service provider that controls most first digital interactions with customers.

The integration provides Mastercard with access to telecom networks as an entry point into the card ecosystem. This shifts early ownership of customer relationships away from banks and toward mobile network operators.

The U.S. prime market is mature. Card penetration is so high that even when there is an opportunity for someone to have another credit card, the reward costs associated with acquiring the new consumer increase dramatically.

And, as interchange continues to be a major cost factor, U.S. issuers are now competing for share of wallet rather than trying to get the next new account opened.

In sharp contrast, many developing regions continue to have significant portions of their population either unbanked or under-banked. With the development of digital identity systems and expanded mobile-wallet capabilities, individuals can bypass the traditional banking infrastructure.

This partnership is an indicator of where the next 100 million credit card accounts are going to come from — the mobile-first consumers who access financial services through digital channels before they establish a relationship with a traditional bank.

Many developing regions continue to have significant portions of their population either unbanked or under-banked

“Joining forces with Mastercard marks a bold step toward the future of money movement… Together, we are driving financial inclusion, accelerating innovation, and creating new growth opportunities across the globe,” said Ericsson Head of Mobile Financial Services Pavan Bachwal.

That doesn’t necessarily indicate that U.S.-based issuers will immediately start competing for those customers. But as Mastercard becomes embedded in those ecosystems, the U.S. and global issuers will likely compete for revolving credit portfolios created by telecom-based customer relationships.

By developing a history of transactions and creating a digital profile with their telecom service providers, credit products can be layered on the digital profiles that are developed by consumers on these services. Mobile wallets are now serving billions of users globally, particularly in markets where traditional banking access remains limited.

That’s how consumers can move from using digital wallets to prepaid tools, debit cards, and eventually to credit. When consumer digital profiles mature, global issuers may introduce premium rewards, travel benefits, and higher limit revolving products on top of telecom-native accounts.

Prime-market issuers seeking to grow overseas will have to determine whether partnerships with telecom companies are a key path to future growth opportunities or simply treat those regions as secondary markets.

Mastercard’s infrastructure development in high-growth regions will give issuers connected to Mastercard an early advantage in reaching potential new customers in those regions, as well as through cross-border spend generated by emerging, mobile-first economies.

Telecom provider data on airtime usage, wallet transfers, and transaction history can help identify “hidden primes,” or individuals with a stable income and good payment habits who do not have credit files with traditional bureaus.

Lastly, there is a possibility that telecom companies could have more control over how consumers interact with their brands — and potentially the earliest interaction point.

If telecom companies maintain control of the front-end relationship with consumers, then issuers risk having less brand visibility. They will be less likely to develop customer loyalty if they don’t build a presence within the telecom company ecosystem.