MICROCAPITAL BRIEF: Malaysia Digital Economy Corporation (MDEC), Mastercard Partner on E-money, Payment Cards, Islamic Fintech, Mentoring, Technology Training for Girls

The Malaysia Digital Economy Corporation (MDEC), a government-controlled entity, recently signed a memorandum of understanding with Mastercard, a US-based payments company, to “facilitate the rollout of Mastercard payments and business technologies” in Malaysia. The goals of the agreement include to: (1) create enabling infrastructure for micro-, small and medium-sized enterprises (MSMEs) to capitalize on the growth in e-commerce that has occurred during the COVID-19 pandemic; (2) leverage “Mastercard’s global mentorship programs and signature Girls4Tech STEM curriculum” to improve the technical knowledge and financial literacy of women and girls; and (3) support financial technology (fintech) companies that follow Islamic law via StartPath, a Mastercard program that supports the growth of early-stage firms. Islamic finance employs mechanisms such as the sharing of profit and loss in lieu of conventional interest payments, which are not allowed under Shariah law.

The products to be targeted at MSMEs in Malaysia include Mastercard’s Tap-on-Phone and payment gateway services, which facilitate the acceptance of credit and debit cards; Kinoect, a microloan service for sellers of fast-moving consumer goods; and Simplify Commerce, which supports smaller businesses in selling products online.

MDEC CEO Pn Surina Shukri said, “By working with Mastercard and drawing on their expertise in developing vast electronic payment infrastructure, we look forward to tackling a range of pressing economic and social issues through technologies that better connect individuals, communities and businesses to become digitally-skilled Malaysians and digitally-powered businesses of all sizes across the country.

Headquartered in the state of New York, Mastercard is a payments and technology company connecting consumers, financial institutions, merchants and governments in approximately 210 countries and territories. As of June 2020, Mastercard reported net income of USD 1.4 billion on revenue of USD 3.3 billion and total assets of USD 32 billion.

Established in 1996 as the Multimedia Development Corporation, MDEC is tasked with overseeing Malaysia’s transition into a “digital economy.” For individuals, it offers programs such as eBerkat, an initiative for boosting financial literacy. For businesses, MDEC focuses on initiatives that target small and medium-sized enterprises.

By Nathan Kiplagat, Research Associate

Sources and Additional Resources

Mastercard news release
https://newsroom.mastercard.com/asia-pacific/press-releases/mastercard-and-mdec-ink-mou-to-drive-electronic-payments-and-accelerate-financial-inclusion/

Mastercard homepage
https://www.mastercard.com

MDEC homepage
https://mdec.my

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