A new report from MasterCard indicates that mobile devices and prepaid cards may drive financial inclusion in underserved and underbanked communities across India, Indonesia, Vietnam, the Philippines, Egypt and Nigeria.
The study examined excluded and underserved communities, which, according to MasterCard, are most likely to be people ages 28 to 41, on average. Most people who are considered to be financially excluded and underserved have secondary education and a job, and the average monthly household income ranges from $200-$500.
“Understanding the needs and attitudes of these consumers has provided us with important insights,” MasterCard Southeast Asia President Matthew Driver said. “For example, the financially excluded or underserved in urban centers are reasonably well educated and largely employed, so inclusion efforts in cities should be primarily focused on building more relevant, lower cost products and services rather than basic financial literacy. This means that with the right approach there is huge immediate potential in such environments to bring many people into the financial system.”
According to the study, most people in underserved communities have heard of prepaid cards, but less than five percent across all markets use them. The study also showed that while a majority of the communities surveyed had access to a mobile telephone, the devices were generally standard phones and lacked smartphone capabilities.
Driver said, however, that the combined use of prepaid and mobile phones may drive financial inclusion as an entry point to the financial system.
“The high use of mobile phones in these emerging markets also creates an opportunity to drive financial inclusion,” Driver said. “We believe that a prepaid card linked to the mobile phone account can provide a simple entry point into the financial system and bridge the gap between the formal financial services sector and the millions of underserved or unbanked individuals, especially when combined with services such as bill payment and P2P capabilities. The key is providing relevant services with high convenience and low cost that empower them to change their lives for the better.”