Implications
While the efforts to further extend financial inclusion can have profound implications to individuals, the ability of e-payment is becoming more potentially transformative
In general, electronic payments can both accelerate traditional financial inclusion but also open access to relevant services that meet real needs and, more importantly in low-income segments, create new opportunities to generate income.
1. For Individuals
Safely accumulating money for financial goals like education or home ownership; or getting access to credit to start a business, can be life-changing tools for the unbanked and those with lower incomes both in developed and emerging markets.
2. Financial Services
To begin with, electronic payments can enable financial services providers to lower the high costs of originating and distributing banking or insurance products by not having to maintain a branch network or pay agents to disburse and collect loans. By decreasing their overhead, these organizations can offer more affordable credit.
3. For Digital Economy
What is potentially more important than access to financial services is the access to the digital economy that has developed on top of mobile app ecosystems over the last few years. These services can be non-hotel travel accommodations, car sharing services and digital content delivered directly to devices.
Digital economy goods and services are usually provided by businesses with no “retail presence”; therefore, the ability to pay and collect remotely is an absolute requirement to access the service (from the consumer’s point of view) and to develop a business (from the provider’s). While some of these services are delivered in-person, the business still needs to collect remotely.
4. Opportunities for low-income and unbanked segment
In these segments, usually more prone to unemployment and financial shocks, assets like personal time and extra space at home can create massive business opportunities for buyers and sellers in services like TaskRabbit and Airbnb, respectively.