Mobility Capital Finance (MoCaFi), a mobile-first banking platform, has secured an investment from Mastercard, as well as the start of a new partnership with the payments giant.
By working together, the companies hope to bring alternative financial services to underserved communities, with a focus on bringing tailored digital tools and new payment cards to low wealth minority and Black communities.
MoCaFi and Mastercard have been working together via the Mastercard StartPath program, which helps startups.
With the equity support, MoCaFi hopes to address inequalities in the financial system for the underserved by providing them with access to banking, credit building and wealth coaching.
As part of the partnership, MoCaFi will broaden the reach of its services to more cities in the US.
MoCaFi founder and CEO Wole Coaxum said, “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.
“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.”
MoCaFi states that the lack of access to basic financial services means that Black individuals spend between 50% and 100% more each month for basic banking services. This adds up to around $40,000 in fees over a lifetime, it said.
This investment from Mastercard is part of its $500m commitment to close the racial wealth and opportunity gap in the US.
It recently launched The Strivers Initiative, which is aimed at elevating Black entrepreneurs overcoming obstacles to maintain and grow their business.
Mastercard vice chairman and president Michael Froman said, “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.
“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.”
Earlier in the week, First Boulevard reportedly closed a $5m seed round. The challenger bank is aimed at supporting the financial needs of Black Americans.
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