Technology giant Mastercard recently announced the launch of its Smart Islands program in the Caribbean, leading the journey towards developing smarter islands and cashless societies to strengthen economies throughout the region.
“Innovation is in Mastercard’s DNA,” stated Jimena Elia, Director of Market Development for Mastercard Caribbean. “We are excited to reveal this multi-layered technology that can help expand the tourism industry’s earning potential and build the Caribbean’s resilience to natural disasters by developing smarter islands built on cashless societies.”
The Smart Islands program is prime to reap significant gains for the region, most notably within the tourism industry, an essential economic driver. Tourism accounts for nearly 15% of the Caribbean’s GDP; and over 50% on many islands. The region attracts 57 million visitors each year and directly and indirectly provides more than 2.3 million jobs.
The data and tourism insights that the Mastercard Smart Islands program provides can help Governments and Destination Marketing Organizations (DMOs) define a country’s ideal tourist, enabling more efficient marketing investments with higher ROI.
Mastercard can help Governments smartly leverage data analytics to:
● Enable DMOs by leading with tourism insights and value case models to reach the “ideal” tourist and maximize ROI
● Provide Advisors services to manage targeted campaigns and results
● Use Economic Dashboard(s) to monitor and measure results
Over the last ten years, tourism growth has been steady and significant, with micro and small enterprises throughout the area playing a critical role in the economic ecosystem. However, only a tiny portion of companies in the region accept electronic payments. Today, out of the total of 1.4M merchants in the region, only 10% of those are accepting electronic payments.
Independent research shows that foreign tourists are more likely to spend money where making payments is convenient and secure. To leverage the full potential of tourism for inclusive growth, international visitors need to be stimulated to venture beyond the few centers where they congregate, traveling far and wide across the country.
Opening card acceptance among MSEs expands tourist dollar reach beyond the traditional tourist centers, democratizing the industry, fostering financial inclusion, and spreading wealth.
- MSEs contribute nearly 50% of the Caribbean’s GDP
- There are more than 1.4M MSEs in the region
- MSEs provide the vast majority of jobs available in the region
While driving tourism to the region is vital, the Caribbean remains vulnerable to natural disasters, with 63% of all disasters that have hit small states since 1950 occurring in the region. These natural disasters severely cripple economies, often hitting the ever-important tourism industry and MSEs the hardest due to an inability to quickly recover. Lack of data and identification are key factors prohibiting fast recovery after impact.
- High informality (lack of data & identification) adds to a more significant challenge in providing emergency support during and after impact.
- Challenges around reliable electricity and connectivity
- Poor access to relevant data insights contributes to a slower and more expensive recovery process, with no data to better feed the government the right directions to (re)act
Digital ecosystems facilitate seamless, fast, and transparent disbursements of funds in times of crisis. Providing the elements necessary to facilitate more rapid recovery in a humanitarian crisis is essential to preserve investments and business sustainability.
The Smart Islands program can help governments implement Smart IDs with payment functionality to streamline government disbursements and help to facilitate immediate aid assistance when necessary, even in the most adverse conditions. Smart IDs with payment functionality included (Driver License, Fiscal ID, National ID) can also be used as an instrument to financially include the unbanked population.
Marcelo Tangioni, Mastercard’s Caribbean Division President emphasizes the technology company’s commitment to transformational advancement, stating: “Mastercard is steadfast in its goal of expanding its footprint throughout the Caribbean. Advances in technology like the Smart Islands program can help to strengthen economies, foster stronger relationships with MSEs, and increase financial inclusion. The Caribbean has strong digital momentum, and that momentum is the key to future digital evolution.”