Why Mobile Wallets Might Work for ASHA – And Many Others
In this blog post, Amit Maheshwari and Vartika Shukla begin by narrating the difficulties faced by a health worker in rural Bihar in accessing her bank account. They note that while mobile wallets can be a solution for many like her, there are issues to overcome here as well. There are regulatory constraints on who can offer savings services, for instance. Also many CICO agents encourage faster, more lucrative over-the-counter transactions, rather than the much longer-term, customer-growth potential that mobile wallet business represents. They conclude that government payments can be easily coordinated through mobile wallets, bringing significant savings to the exchequer as well as to the beneficiaries. While it is true that cash-out is an imperative now as people will not get over the preference for cash immediately, all those who are paid over mobile are more likely to use the same mode for further payments. In the long run, therefore, creating a conducive environment for mobile wallets will help the transition to a less-cash economy.
Mobile Money – What Lurks Behind All the Numbers
Nishant Kumar takes a hard look at the mobile money landscape. On one hand, he opines that adoption of mobile money can be rapid as telcos, unlike the banks, find these low net worth customers attractive and are only too happy to add payment services to their core business services like airtime top-up, whenever the law permits. Further, telcos have the capability for mass marketing that can raise awareness of digital payments, conveying simple, compelling propositions to an initially less than eager public. More importantly, those paid over mobile, especially via a full-frills bank account, are much more likely to continue using the mobile for payments. On the other hand, he notes that the strong preference for cash makes costs and logistics a challenge for telcos. Thus, there have to be strong incentives to move people away from cash and towards digital payments. For such an eco-system to work smoothly, there is need for more m-payees (merchants, institutions and individuals willing to receive non-cash payment), more live demos to build trust in this new mode of payment, no charges (at least initially), simple transaction platforms etc. He concludes that even though users may not demand mobile payments yet, this new mode should be encouraged. Digital payments form the first step towards universal financial inclusion, making all investments in this space worth their while in the long run.
Section I: Policy – the latest from India’s policymakers
Report of the GIRO Advisory Group
Reserve Bank of India, April 23, 2014
Scaling up of the Business Correspondent (BC) Model – Issues in Cash Management
Reserve Bank of India, April 22, 2014
Report of the Group on Enabling PKI in Payment System Applications
Reserve Bank of India, April 22, 2014
Issuance and Operation of Pre-paid Payment Instruments in India – Consolidated Revised Policy Guidelines
Reserve Bank of India, March 28, 2014
Section II: News and Views Digest – the latest from India and abroad
Vodafone India to implement making NREGA payments through its M-Pesa service
IFC, partners focus on e-payment systems for India’s low-income households
'M-Pesa' launched in Kerala
Mobile operators dial migrants to power money transfer
How Aadhaar, India Post can transform India's finance
'Differentiated bank idea premature': State Bank of India report
Why not a ‘Post Bank of India’?
Communication – The Achilles Heel of Direct Benefit Transfers – Part I
Much remains to be done on financial inclusion: RBI Deputy Governor KC Chakrabarty
Bandhan gets a bank licence: Can it survive as a bank & yet be true to its original spirit?
Banking on confusing signals
Why is financial inclusion in India not improving? New Numbers, New Approaches
Seasonal, unsteady income drives economic vulnerability in Brazil
M-Shwari in Kenya: How is it really being used?
The State of Mobile Insurance – what are the key factors currently driving success?
The State of Mobile Money Ecosystem – How does building an ecosystem impact profitability and help create an efficient and affordable way to facilitate payments on a large scale?
How to improve agent performance with incentives
The State of Mobile Money Revenues – is there really any money in mobile money?
Section III: Research – surveys and studies on expanding access to financial services
Financial Inclusion and Development: Recent Impact Evidence
Robert Cull, Tilman Ehrbeck and Nina Holle, CGAP, April 29, 2014
Alternative Financial Education Approach to Design Effective Financial Education/Capability Programmes
Akhand Tiwari, Akhilesh Singh, Nishant Kumar and Nitish Narain, MicroSave, April 17, 2014
China: A New Paradigm in Branchless Banking
Leesa Shrader and Eric Duflos, CGAP, April 11, 2014
Enabling Mobile Money Policies in the Democratic Republic Of Congo
GSMA, MMU, April 10, 2014