21 February 2023, New Delhi: Mastercard and Obopay today announced their collaboration to launch a financial inclusion card for smallholder farmers and rural communities. Powered by Mastercard’s Community Pass digital infrastructure, the prepaid card will allow farmers to receive the sale proceeds for their crop digitally, spend their earnings to make purchases even in remote locations that have poor or no connectivity, and build a transaction history based on their income and expenditure to access customized credit options.
The prepaid card will work in tandem with the existing Mastercard Farm Pass platform wherein the farmers will be able to receive payments into their prepaid card account, thereby allowing them to use it to transact at local outlets. Farm Pass is part of Mastercard’s broader Community Pass infrastructure.
While 80% of the rural population has bank accounts, the rural economy still runs on cash due to challenges around digital acceptance, connectivity, and branch banking experience. Prepaid cards have so far seen limited traction in rural areas owing to lack of inflows into the accounts. Digitizing the agriculture value chain can ensure that farmers can use their money to transact at merchant outlets in rural areas. The card solution developed by Mastercard and Obopay is unique as it has the ability to also work offline in remote areas, ensuring rural acceptance of digital payments for buying farm inputs, agriculture equipment, or other essentials.
Obopay will link the online Prepaid cards with offline digital wallets at the backend to ensure a seamless experience for users. This will result in the digitization of farmer spend while leveraging the existing acceptance points of sale in villages and semi-urban areas. By building a digital record of farmers’ spend and income, the solution will also facilitate customized credit. The card will target smallholder farmers, Self Help Group members, small buyers, and traders, along with the adjacent rural ecosystem.
Shailendra Naidu, the CEO, of Obopay, said, “Digital payments can be a game changer for farmers in today’s technologically driven ecosystem. We are proud to collaborate with Mastercard and develop solutions that will empower farmers in a commercially sustainable way by helping them access online payments and credit.”
The offline wallet feature on the card will enable cash-in-cash-out transactions in non-network areas, making it a particularly relevant solution for farmers in remote areas who lack connectivity or cannot afford data. It will also allow farmers to securely receive and store money in multiple wallets on the card and ensure a consistent user experience across products.
Himanshu Bansal, VP, Digital and Financial Inclusion, Mastercard Community Pass, said, “Farmers in remote areas are often stifled by challenges related to connectivity, data speed, and complexities in using digital platforms. To address these concerns, Mastercard aims to empower them through solutions that are tailored to their needs and ensure transparency in the payments ecosystem. Research has shown that 50% of users who experience transaction failures during their first digital transaction go back to cash. Mastercard is delighted to collaborate with Obopay to digitally empower farmers and eliminate the credit access challenge.”
Mastercard recently achieved the milestone of benefiting over one million smallholder farmers in India through Farm Pass, its scalable rural and agriculture digitization solution. The launch of the digitally integrated financial inclusion card further strengthens the company’s commitment to digitizing the rural ecosystem.