Mastercard has announced it is launching a massive $500 million investment into Black communities amid the coronavirus pandemic, which has hit those groups disproportionately hard.
The initiative — announced Thursday — also comes on the heels of a summer that has seen nationwide protests and the resurgence of the Black Lives Matter movement following the killing of George Floyd, a Black man, by a white police officer at the end of May.
“[Floyd’s death] was a big context for this work,” Marla Blow, senior vice president of social impact at Mastercard, told The Hill. “It really highlighted the importance of the disparities in our society and really drove home the urgency of the moment that we are in. While we’re dealing with all of the already ambient vulnerability associated with [COVID-19] and with people being vulnerable economically … we’re now faced with the fact that there’s another risk that’s specifically targeted towards Black communities of being a victim of police brutality.”
Split into three main parts, the investment will focus on making financial tools and services more affordable and accessible for Black communities as well as investing heavily in Black-owned small businesses.
One aspect of the initiative expands Mastercard’s City Key program with the goal of “enabling more than 1 million residents with digital access to essential financial tools and support.”
The company chose seven cities — Los Angeles; New York; Atlanta; St. Louis; Birmingham, Ala.; Dayton, Ohio; and New Orleans — to participate in the program, partnering with their respective mayor’s offices.
Mike Froman, vice chairman and president of strategic growth at Mastercard, cited the long-standing historical wealth inequalities that Black communities still struggle with today.
“Black families own about one-tenth of the wealth of white families,” Froman told The Hill. Black Americans, Froman continued, pay 50 to 100 percent more for “basic financial services” which can cost nearly $40,000 over a lifetime.
This inequity has only been exacerbated by the pandemic.
“While all small businesses have been affected by [COVID-19], we see a disproportionate adverse impact on Black-owned small businesses, down about 40 percent by revenue compared to 17 percent for other small businesses,” Froman explained.
A survey by the Global Strategy Group in May showed that only 12 percent of Black and Latino-owned businesses received the full amount of aid they applied for through the Small Business Administration — including the Paycheck Protection Program that was established by Congress’s $2.2 trillion CARES Act in March to help ailing businesses during the pandemic.
Blow added: “Where financial services [are] contributing to the disparity that is a place where we can intervene.”