Mobile Money: The answer to financial inclusion for unbanked

Mobile Money has long been touted as the solution to include persons without a bank account and who are unable to qualify for a credit card to become a part of a county’s financial inclusion plan.

Players have entered the local market and have had to exit due to disappointing subscriptions, but President of the Caribbean Division at Mastercard, Marcelo Tangioni said he has high hopes for his product.

“With the prepaid card, you don’t even need a banking account, so for LAC (Latin America and the Caribbean) markets this is very common, the level of banking penetration of our markets is not necessarily very high and even for the ones that are banked, sometimes the person doesn’t qualify for a line of credit, for the ones that do not have a relationship with the bank, then how do we address that problem?”

Ideal solution

“The prepaid is a solution for that, so I believe it’s a very powerful solution for our markets because again, it’s a very simplified way in order to give people access to shopping online, to make safer payments, not necessarily having to keep money under the mattress, without necessarily becoming customer of a bank, eventually, hopefully, one day they will enter the financial system, but I think as an entry level product, it’s an industry solution,” said Tangioni, who was speaking with The Gleaner at its annual Innovation Forum for Latin America and the Caribbean , in Miami Beach, Florida, recently.

The MyCash Jamaica, described as a physical and also a digital prepaid, is in collaboration with Digicel and Sagicor Bank, and promises to make customers’ lives easier, as all one needs to do is download the app, complete the registration form and submit an ID to collect their prepaid Mastercard at Sagicor Bank. The card can be used to collect remittances, pay at point-of-sale terminals, and shop online.

Mastercard said the card can be used anywhere in the world that Mastercard is accepted. Tangioni said he was not able at the time to say how many persons have shown interest in the product.

“We cannot share exactly the numbers because we have other partners in order to do that, but for now, the pilot was extremely successful in terms of pointing out the things that we needed to do, so there were a couple of fixes that we needed to do, but those have already been made. I believe as of three, four weeks ago and now is the time that we are really going to start rolling out, so far it’s all going according to plan, too soon to say we are successful because again, we are on pilot phase now, we need to scale but based on the expectations that we had it’s working extremely well,” said Tangioni.

Jamaica now has three mobile money providers. In 2016, 14 per cent of Jamaicans had transactional bank accounts bank with corresponding cards. Fifty-two per cent were underbanked and 34 per cent were unbanked.