While technology-enabled business models continue to dominate the financial inclusion headlines, we heard from our interviewees that “we’re not as far along as we think we are.”
We see increased enthusiasm for, and movement toward, closer engagement between the public and private sectors. Such engagement allows the public sector to be more informed about the risks in technology-enabled business models and enable the private sector to move more confidently, understanding the approach policymakers are taking toward innovation. In September, the Alliance for Financial Inclusion announced a Public-Private Dialogue Platform, building on a prior regional effort. Both public and private sectors are actively seeking opportunities for knowledge sharing and product testing.
A priority area for dialogue is interoperability, and this year there have been several noteworthy moves, some highlighted here involving cooperation between the public and private sectors. Major financial institutions in Peru, for example, established a platform for interoperability for banks, non-bank financial institutions and mobile networks.
Technology-Enabled Business Models
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mVisa in Rwanda
In 2011, Visa Inc. established a partnership with the Government of Rwanda to promote financial inclusion through the development of an interoperable mobile banking service. The result is mVisa, which allows any account holder to access financial services from any Visa agent or merchant regardless of financial institution or mobile money provider. All nine commercial banks in Rwanda now issue Visa credit and debit cards, and have quintupled the issuance of cards since 2011.
While technology-enabled business models continue to dominate the financial inclusion headlines, in our industry assessment, we heard that “we’re not as far along as we think we are.” Much work remains to advance the two main recommendations from the FI2020 technology roadmap on creating a more supportive regulatory environment for technology-enabled business models and on leveraging G2P payments to increase financial inclusion. Here we highlight a number of initiatives and calls to action that have been especially salient in the last 12 months.
We are eagerly awaiting numbers to confirm our belief that government-to-person (G2P) electronic payments are one of the fastest-scaling products globally. While there has not been a global survey of G2P payments in the past year, we have seen an increase in the Philippines, Kenya, Egypt, Bangladesh, India, Pakistan, and Mexico, among others, many assisted by the Better Than Cash Alliance.
The World Bank predicts that governments can save up to 75 percent in delivery costs by switching to electronic payments. However, a fundamental question remains: will G2P electronic payments be an on-ramp to greater financial inclusion, or will recipients just use them as an alternative way to withdraw money? We would like to hear about G2P initiatives that build in incentives for saving.
Financial Inclusion 2020: Round-Up 2014