Role of Mobile Wallets in Creating Opportunities and Transforming Lives in Rural Households
This paper discusses advantages of mobile wallets in helping the poor access financial services and transforming their lives.
Mobile banking and payment services through mobile wallets are an extension of the mobile phone revolution. They allow financial services to be provided to marginalized classes, thereby empowering them. Mobile wallets:
- Provide the ability to transact close to home, and cut cost of travelling to operate the account;
- Allow banks to forgo the investment of building branch networks;
- Spur economic activity in the local market by creating agents;
- Minimize fraud and ensure deposit safety since agent accounts are mostly funded, and banks are subject to strict regulations;
- Bring down transaction costs for customers since agents are not as costly as bank employees;
- Increase customer comfort levels, since the poor are more comfortable visiting agents than banks;
- Increase savings among the poor once they start trusting agents;
- Allow banks to offer financial products packaged especially for the poor.
The paper discusses success stories of mobile wallets from around the world, and states that they are likely to become mainstream over time.