Mastercard Forays Into Global Remittances?
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Is Mastercard Mastering The Science Of Money Transfers?

Updated on January 09, 2022 12:34 pm

"There are some things money can't buy. For everything else, there's Mastercard."

Mastercard's famous slogan, launched in 1997, still rings true today. While Mastercard remains one of the most successful financial brands globally, our relationship with money has evolved, especially regarding money transfers.

Technology has redefined the whole financial industry from conventional loans to the blockchain. Traditional banks have the licenses that the challenger brands are chasing, and on the other hand, traditional banks are chasing to innovate. While the tug of war between traditional and challenger banks remains, consumer expectations are rising.

So, is Mastercard mastering the science of money transfers?

The science of money transfer is complex, especially for cross-border transactions. To begin with, when you send money internationally or make a cross-border money transfer, there are multiple players involved. Now, let's look at it from Mastercard's perspective.


The process starts with the party initiating the transfer, which we will call the sender, and ends with the party receiving the funds, which we will call the beneficiary. You have financial institutions and delivery channels to facilitate the money transfer in the middle.

Keep in mind that all parties in the ecosystem need to be compliant with all regulatory requirements of both the national and international laws relating to Know Your Customer (KYC), Anti-Money Laundering (AML), and Countering the Financing of Terrorism (CFT).

Mastercard Cross-Border Services facilitates banks, non-bank financial institutions, and digital partners to send money internationally to any endpoint for any purpose in over 100 countries and 50 currencies.

Any purpose for money transfer from a consumer sending money to friends and family or business sending wages to contract workers to any endpoint could be bank deposit to the mobile wallet.


Mastercard Cross-Border Services connects 90 percent of the world's population for any purpose of money transfer to any endpoint: bank accounts, digital wallets, cards, and cash agents, all through a single and secure point of access.

In the consumer sector, money transfer companies such as Xoom and Remitly have even started offering payouts through multiple channels, including pawnshops in the Philippines, home delivery in certain countries, and digital wallets payouts.

In contrast to this paradigm of rapid digital adoption, businesses continue to make cross-border payments using the same conventional methods. According to the Association for Financial Professionals (AFP), 7 percent of cross-border payments made in the U.S. were still made by check. The receiving side of money transfers remains cumbersome and expensive.

The remaining payments were made electronically and were primarily wire transfers initiated through a bank interface to the SWIFT (Society for Worldwide Interbank Financial Telecommunications) messaging system. Businesses typically tend to rely on their primary bank to conduct these transactions.


While different touch points will have different driving factors, there are a few common goals such as:

  1. Transparency
  2. Accessibility
  3. Low cost
  4. Speed 
  5. Security

Transparency: While cross-border money transfer has remained stagnant for decades, technology advances and market demand drive innovation. Consumers and businesses want transactional and fee transparency - all costs to be known upfront and trackable. Think Amazon, but for money transfer. 

Mastercard is in a unique position to meet the demand for transparency. Currently, Mastercard shows the pricing details and the expected timing of settlement upfront before completing a payment.

Transparency is expensive, slow, and complicated for banks and financial institutions, which brings us to the next factor  - the cost of money transfer.

Low-cost money transfer: Mastercard is a trusted intermediary in a complex payment system. Outside China, Mastercard is one of the top global payment networks alongside Visa and American Express.

Mastercard settles with banks through its existing settlement process allowing for cost transparency and payment speed. Economies of scale and innovative solutions lower costs for all senders.

Accessibility: Mastercard can serve several participants such as banks, non-bank financial institutions, and digital partners to send money internationally to any endpoint for any purpose. Being a trusted brand and a versatile service provider has been equally vital for its success in the current cross-border landscape.

Mastercard provides a compliance framework, and API connectivity for cross-border services are supported in several programming languages and can be easily integrated.

Speed: Consumers and businesses want fast delivery of funds. Delayed payments and payouts have always been a challenge in the remittances industry, and the pandemic only exacerbated this pain point.

Mastercard's capabilities mean that it provides real-time payments in as many markets as possible. Settlement occurs in a range of same day to no more than two days and currently is also near real-time in 11 markets. Mastercard settles with banks through its existing settlement process.

Security: Mastercard is a globally recognized brand and has an extensive network worldwide. It takes a lot of capital and technological expertise to establish new networks and data centers and, most importantly, gain trust from financial institutions and cardholders.

The last reported major security breach of Mastercard was in 2019 that likely affected Belgian and German users, as reported by Bloomberg. Security is a top priority for any brand today. Any breach in security will harm Mastercard more than any stakeholders.

In conclusion, as a brand, Mastercard has successfully curated campaigns that resonate well with the different consumer groups of multi-cultural and ethnic diversity.

Mastercard connects customers to a global platform through a single, secure point of access that enables reach to billions of card, bank, and digital accounts, in addition to cash-out locations, in over 100 countries and growing.

Mastercard has a growing list of global partners that can make money transfers quicker, predictable, and accessible. Mastercard partnerships with the businesses side, both the traditional banks and the challenger banks, will be interesting to watch, especially with the digital-only banks or neobanks such as Monzo and Revolut in the United Kingdom.

The company's ultimate north star is its vast network. The process of building and extending networks is a never-ending process, and it is perpetually evolving to get to the better version of the previous one. The company plans to build up more connectivity directly with the underlying platforms, where that makes sense, especially in high-volume occurrences. The evolution also extends to how the company enables customers to use the network, not just its many endpoints.

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