Newark fintech Mobility Capital Finance, or MoCaFi, garnered an investment from Mastercard Feb. 26 to expand its card programs and solutions to help address the inequities in the financial system for the underserved and underbanked.
MoCaFi, which focuses on providing tailored digital tools and payment cards to low-wealth minority and Black communities, has been working with Mastercard via the Mastercard StartPath program, a springboard to help later-stage startups maximize their opportunity for success.
The investment is part of Mastercard’s $500 million pledge to close the racial wealth and opportunity gap in the U.S., launched in September; and with it, the financial companies will scale their collaboration in cities across the country to expand access to vital programs such as financial aid and social benefit programs.
The team has already launched initiatives in Honolulu to enable critical financial assistance and are supporting universal basic income pilots in Newark, San Francisco, and Columbia, S.C.
“As a neo bank focused on closing the racial wealth gap, MoCaFi sees a great opportunity to create market-based solutions that address the structural economic inequality that exists in this country,” said MoCaFi CEO and Founder Wole Coaxum in a prepared statement. “Social justice without economic justice is like one hand clapping. Mastercard’s investment into MoCaFi gives us the basis to scale our operations and create the impact that we seek to deliver – providing us another hand to serve communities.”
The lack of access to basic financial services means that Black individuals are spending 50 to 100% more per month for banking services, which over a lifetime add up to $40,000 in fees. The digital Mastercard Money Connect Solutions will help reduce dependence on payday lending, allow people to send money to relatives affordably; enable simple real-time bill payment and check deposits by phone.
“Mastercard is leveraging our company resources – everything from our products, services, technology and financial support – to help close the racial wealth and opportunity gap. Partnerships are critical to achieving that goal and we’re continuing to expand our support for and collaboration with Black entrepreneurs,” said Michael Froman, vice chairman and president of strategic growth at Mastercard.
“By investing resources and capital directly in Black and minority-led companies like MoCaFi, we can build the capacity of those with a direct connection to underserved communities and help them to scale. We are optimistic that together we can start to drive the change needed to help everyone reach their potential,” Froman said.=