How Unbanked Population is Receiving Benefits from Branchless Banking?


Share on LinkedIn

People’s pursuit of a cashless society has a long history. The development of cutting-edge equipment that can replace cash for electronic payments by technology companies, the digitization of financial institutions, and the government’s proposal for citizens to use electronic payments are all measures to promote a cashless society as a whole. Some people will think, how should we define cashless banking without a bank account? How does it affect our society?

What is cashless banking?

At present, a cashless society is regarded as an economic state: financial transactions are not made in “physical form” (paper money or coins), but through the transfer of electronic information. Advocates of a cashless society see the potential of electronic transactions because it allows individuals to access financial services and allows transactions to proceed quickly regardless of location and time constraints.

This promotes the development of small businesses and allows basic trade to be conducted in developing regions that lack banking infrastructure and sound regulations.

Electronic payment allows transactions to be fully traceable, points out the direction for tax regulators to combat tax evasion, and allows security agencies to track terrorist fundraising, money laundering, corruption and other financial crimes (but crimes can still be committed through the dark web and the encrypted digital currency Monere )behavior.

Cashlessness also helps reduce the cost of maintaining banknotes in circulation, allowing the government to better control the flow of money when it implements damage control measures during a crisis.

Can branchless banking payments system bring value to the unbanked customer?

Can cashless banking system bring value to the unbanked customer?

The macro benefits of a cashless society are obvious, but is cashless microcosmically beneficial to unbanked users?

Compared with electronic payment, cash seems to have a slight advantage because it is not prone to “offline” risks, and the effort required to pay with cash is similar to the current electronic payment methods (Apple Pay, Android Pay). The current electronic payment is still very fragmented. Different platform standards provide similar services, and it is difficult for consumers to have a seamless user experience.

This gives users a lot of small “frictions” during use. Users need to create an account with an e-wallet provider, pass identity verification (enter ID and other relevant information), bind the account to the credit card, and transfer the credit card limit to the e-wallet before they can use it to pay. But if the merchant uses another electronic payment system, these steps need to be repeated, otherwise they can only pay in cash.

Similarly, merchants need to manage many cashless point-of-sale systems (POS), each with a different UI (user interface), contract terms, and user experience, which makes merchants a headache. Not to mention that merchants need to pay for every electronic payment service. This makes unnecessary intermediary fees in the transaction process and adds additional taxes to the planned transaction process. This method is very inefficient and will squeeze social value.

Fintech Development of Branchless Banking

However, the outlook for cashless payments is not completely bleak. There are signs of real cashless payments in some of the most innovative companies that are testing technology to change our basic behavior.

Amazon launched the first grocery store without a cashier area. When the customer checks out, the computer vision sensor detects the shipment and transfers the payment from the customer’s Amazon account, eliminating the checkout link. This method effectively omits the act of payment and brings real value to the end user, so that they do not have to pay when shopping.

Although this innovative method has not been promoted and used, it provides direction for creating a cashless society with real impact. Consumers can enjoy additional convenience, potentially promoting changes in social payment behavior.

Along with the new initiatives that promote the development of the current society to a cashless environment, there have been many buzzwords about electronic payment and electronic wallets. However, building a cashless society cannot rely solely on financial technology, but also requires the joint innovation of multiple industries and multiple technologies.

Money is deeply rooted in our society and is closely related to all aspects of our lives. We need to rethink the system and focus on the meaning of a cashless society. The linear innovation of financial technology is not enough to solve deep-seated problems, nor can it increase the adoption rate of electronic payments.

The public relies heavily on traditional technology to carry out all kinds of daily activities in life. This makes change full of resistance, because at this stage there is no solution for a seamless cashless experience. There is still an urgent need to integrate electronic payment options, but multi-faceted innovations in deep-level technologies may be the key to changing the situation.

These deep-level technologies make the transition to a cashless society less laborious. Therefore, they can transform people’s basic behaviors and become the core driving factors for changing public choices.

No cash to unlock the key to the gold community

The key step in unlocking a cashless society is the automation of deep-seated technological innovation-driven behaviors having branchless banking models, which ultimately makes the demand for such behaviors disappear.

In addition to a healthy ecosystem of financial technology solutions and reasonable regulations, a vibrant cashless society is also needed. For example, using neural sensors to capture customers’ thoughts while shopping, or using computer vision to charge for items that customers need to take away from the store.

As we all know, in order to cause behavioral change (consumers give up existing products and choose specific products), the value of new products must provide ten times the value of existing solutions. Developed countries have standardized financial services and infrastructure to support existing payment methods. Therefore, to achieve a breakthrough in popular choice, it is necessary to make major innovations in existing methods.

These technologies will promote behavioral changes in countless communities, and stakeholders can use them to bring more value to end users. As the government implements more sound policies and financial institutions introduce trusted financial technology solutions, this ecosystem will become more mature, allowing the entire society to have a good cashless experience.

Nikunj Gundaniya
Nikunj Gundaniya, Product manager, one of the leading Digital wallet solutions, which provides mobile finance application development services. He is a visionary leader whose flamboyant management style has given profitable results for the company. He believes in the mantra of giving 100% to his work.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here