Technology’s ability to bring services to people wherever they are and whenever they need them is possibly today’s biggest driver of full financial inclusion. Electronic payments are accelerating this drive now, and newer developments, including “big data,” ubiquitous internet access and cloud computing, may have an enormous impact. ICT promises to enable hundreds of millions of people to access financial services for the first time, thanks to the ability to reach people wherever they are, at a lower delivery cost than ever before. Technology also offers the prospect of more convenient, tailored and responsive services, even for clients recently considered non-users.
The Role of Payment Systems and Services in Financial Inclusion
Retail payment systems and services consist of different systems and platforms, payment products and services that allow firms, individuals, government and other economic agents to transfer money on a daily basis without having to use cash. Retail payments are becoming increasingly more prevalent in today’s economy, thanks to the dynamism digital innovation has brought with new mobile and online payment solutions and products. Meanwhile, international efforts continue to appear for promoting universal access to and use of financial services in an attempt to reduce poverty and improve opportunities and living standards for people that do not use such services.
The importance of developing and using Digital Payments as a mechanism for promoting financial inclusion
• Digital Payments allow an economic agent (payee) to use different methods to meet
their obligations with another (beneficiary) without the need to do so in person, which reduces transaction costs and thereby improves the dynamism of economic activity.
• Incorporation of advances in information and communications technologies (ICT) have converted Digital Payments into ideal channels for promoting financial inclusion as the electronic and digital means available at present have eliminated barriers limiting the unbanked population’s access to payment services.
• Digital Payments offer the possibility for people to reduce the costs and risks implicit
in using cash, thanks to the fact that they are available instantaneously anywhere. This makes them more convenient and easier to use for carrying out transactions on a daily basis, generating incentives to adopt them for various transactions that are generally made in cash.
• Greater use of Digital Payments by the population would lay the foundations for the
adoption of new infrastructures, instruments and channels that would favor more efficient and secure payments, leading to economies of scale that would reduce the average costs of payment services.