Mastercard pledges $500M to help close racial wealth gap

September 17, 2020.

will invest $500 million in Black communities over the next five years, the U.S.-based credit card issuer said Thursday, the latest financial institution to take action to help to close the racial wealth and opportunity gap across the United States.

The investment will include products, services, technology and financial support, Mastercard said, as well as concentrated investments focused on providing Black-owned businesses and Black people with access to financial tools and capital.

Mastercard said half of all Black Americans and Black-owned small businesses are excluded from the financial mainstream and funding opportunities.

Ajay Banga, CEO of Mastercard, said the company has “an obligation as a corporate citizen” to make sure the digital economy is open to all.

“This is a time for action,” Banga said.

The Washington Post reported in June that the wealth of Black households was 8.7% of white household wealth as of 2016; median white household wealth was $149,703 in 2016, while median Black household wealth was $13,024.

Mastercard said it will focus on three areas with its investment, including reducing the cost and barrier to access for many of its financial products and expanding relationships with community development financial institutions. The card issuer also said it is expanding its city programs to Atlanta; Birmingham, Alabama; Dayton, Ohio; Los Angeles; New Orleans, New York City; and St. Louis.

Mastercard said it has helped direct $250 million in capital flow to Black-owned businesses in the U.S. since 2018, an amount it hopes to triple through its current efforts.

Since the killing of George Floyd in Minneapolis earlier this year sparked global outrage over the racial disparities inherent in many aspects of society, several financial institutions have stepped forward to help close the gaps. In June, for example, Bank of America pledged to spend $1 billion over four years to support local communities struggling with economic and racial inequities exacerbated by the COVID-19 pandemic.

Additionally, and the Citi Foundation earlier this week expanded their Pathways to Progress initiative, which helps young people become equipped with skills they need to access employment opportunities in rapidly changing economies, with an investment of $100 million. Since 2014, the Citi Foundation has invested approximately $200 million in the program.