Digital payments solution Obopay has partnered Mastercard to launch a prepaid card and boost financial inclusion for smallholder farmers and rural communities in India. As detailed in the announcement, being powered by Mastercard’s Community Pass digital infrastructure, the prepaid card is set to enable farmers to receive the sale proceeds for their crop in a digital manner, spend their earnings to carry out purchases even from remote locations with poor or no connectivity, and build a transaction history with a basis in their income and expenses to access customised credit options.

Details on the Mastercard, Obopay prepaid card The prepaid card is set to work in tandem with the Mastercard Farm Pass platform, part of Mastercard’s broader Community Pass infrastructure, wherein the farmers will be enabled to have payments received into their prepaid card account, thus being given the option to transact at local outlets. Based on the information detailed in the announcement, although 80% of the rural population has bank accounts, the rural economy is still running on cash, following challenges related to digital acceptance, connectivity, as well as branch banking experience. As prepaid cards have had limited traction across rural areas due to a lack of inflows into the accounts, having the agriculture value chain digitised is believed to help ensure farmers are enabled to leverage their money to transact at merchants’ outlets in rural areas.

The card solution developed by Mastercard and Obopay can work offline in remote areas, aiming to ensure rural acceptance of digital payments for purchasing farm inputs, agriculture equipment, or other essentials. Obopay is set to link the online prepaid cards with offline digital wallets at the backend, looking to provide a hassle-free user experience, which is believed to result in the digitisation of farmer expenses, while making use of the existing acceptance points of sale in villages and semi-urban areas. Additionally, by building a digital record of farmers’ spend and income, the solution will also help facilitate customised credit, with the card targeting smallholder farmers, Self Help Group members, small buyers, and traders, alongside the adjacent rural; ecosystem.

As quoted by Financial IT in the announcement, Shailendra Naidu, CEO of Obopay stated that digital payments can be a ‘game-changer’ for farmers in the current technologically driven ecosystem, and the collaboration with Mastercard is set to help develop solutions that help farmers in a ‘commercially, sustainable’ way, by providing access to online payments and credit. The card’s offline wallet feature allows cash-in-cash-out transactions in non-network areas, thus making it particularly relevant for farmers in remote areas that either lack connectivity or cannot afford data. Additionally, it will enable farmers to receive and store money securely in multiple wallets on the card, aiming to ensure a consistent user experience across products.

What is more, Himanshu Bansal, VP of Digital and Financial Inclusion, at Mastercard Community Pass stated that farmers in remote areas are oftentimes faced with challenges related to connectivity, data, speed, and complexities in making use of digital platforms. Mastercard is looking to provide solutions that are tailored to their needs and ensure transparency within the payments ecosystem as, based on their statement, research highlights that 50% of users whose transactions fail during their first digital transaction go back to cash. Together with Obopay, Mastercard is collaborating to digitally ‘empower’ farmers and eliminate the challenge around credit access.

As per the announcement, Mastercard’s rural and agriculture digitisation solution Farm Pass has helped over one million smallholder farmers in India, and the launch of the digitally integrated financial inclusion card aims to strengthen its commitment to digitising the rural ecosystem. .