The Unbanked, in the Digital World...

For most Australians, not having access to banking, credit and debit cards is almost unthinkable.
Yet most citizens in Asia, Africa, Latin America and the Middle East continue to transact with cash and coins, the closest to banking services is Western Union.

They are the world’s unbanked who have minimal contact with banks and financial services. Though the unbanked make up about half of the world’s adult populace today, emerging financial technology like Public Block Chain Ledgers and associated payments technologies are leading the way to to bring financial inclusion to the unbanked, right on their "Mobile Phone".

Today the unbanked stand at 2.5 billion people. Across the regions from Africa to Asia, rural farmers, women, the poor and the youth make up the largest pie of the unbanked. They grapple with the lack of access to proper banking infrastructure, tedious documentation and paperwork requirements, resulting in financial exclusion from the global financial economy.

All that is about to change, according to Managing Director at VillageMall, Charles Moore the pioneer of Block Chain Ledgers and infrastructure.With the global investment in the burgeoning fintech sector showing significant growth of $1,273 million to $4.1 billion from 2008 to 2014, digital payments for the unbanked have increasingly become a focal point for traditional banks and fintech startups to approach the money economy in a different light.

The objective is for the unbanked to remit, save, transfer, loan and purchase goods and services using mobile technologies, not new currencies, developing a new currency and all the political and social acceptance simply takes too long, the urgent need is today.
Many startups dont understand that money, credit, banking and finance are ultimately tied to trust, there is no point in a disruptive technology that does not address social "trust".
The solution requires a secure global ecosystem, which includes services for secure Global Identity,which still works, when there are no traditional forms of identification. The solution must allow participation in the global payments framework, including meeting the AML requirements when they apply. To drive down the costs this solution cannot be, yet another orphan solution, but must part of a single global ecosystem, with fit for purpose social trust mechanisms. This si no easy task, which traditional banks have not achieved in the last century.

The Unbanked and Mobile Money
In Australia's closest region, Southeast Asia, there are 270 million unbanked citizens many already have access to mobile phones. The Philippines, high in mobile penetration and known to be the third largest remittance market. Several telcos and banks in Asia, having anticipated the dawn of mobile banking for the unbanked, introduced traditional mobile wallets for daily transactions to citizens early on. Yet the only inovation is via start-ups experimenting with crypto-currencies like bitcoins for mobile financial services without the need of banks or other established financial platforms. These approaches have significant risks, while the traditional banking and credit card companies simply protect their momoplies.

The first observation, is that a new currency is simply, not required, to enpower the unbanked of the world, as noted by Charles Moore.

What is required is a Global Payments system based upon a Global Secure Public Block Chain Ledger, with the integrated secure Global Identification system which does not disadvantage the unbanked of the world.

Today, transaction, operation and processing fees are charged upon consumers and merchants for the financial services. Low-income earners, whose annual salaries can usually be counted in hundreds of dollars, grapple with the high cost of bricks-and-mortar transaction and remittance fees

Fintech start-ups are thought to be more robust and flexible with their operations and thus business models. As a result, the unbanked – consumers and local merchants alike – save on costs. Consumers are able to carry out mobile banking at a fraction of a fee, in many cases these can be totally free. In turn, merchants save on transaction charges, monthly or annual rental fees on top of installation and set up terminal fees.

Unlike fintech start-ups, traditional western banks have expanded through acquisitions over the years. Banks have tended to bolt new systems on to existing ones, rather than undertake the more disruptive and costly process of fully integrating them. Hence responding to these challenges is hard for banks, many of which have vast IT systems dating back to the 1960s and 1970s that are prone to problems (see almost monthly bank system outages, some lasting for days!) and expensive to maintain. Furthermore, as people check their accounts more regularly on tablets and smartphones, it puts additional strain on those systems. The fundamental issue remains, commercial banks still find it hard to offer banking services to poor people and still turn a profit.

Yet many fintech start-ups misunderstand that banks still play a dominant role in the global payments, and that a significant part of the fee structures are imposed from regulatory frameworks which are also outdated.

What is needed is a "fit for purpose" Global Solution for everyone.
Without disruptive technologies like the Public Block Chain Ledger, the unbanked will continue to grapple with remittance and conversion fees charged by transfer agents like Western Union, which can cost up to 8.5 to 10 per cent of funds transferred. Banks and credit card providers typically take from 3 per cent for all FX transaction, plus merchant fees, this is out of place even in First World countries. The the true incremental transactional cost is close to zero in a Digital World, with instant, atomic, transactions and zero settlement risk, all typical of modern Block Chain Ledger technologies.

It is simply immoral to take the person’s entire income for the cost of implementing and the transaction process; merchants selling by the roadsides cannot afford to pay for such technological payment, said Charles Moore.

Financial inclusion for the unbanked is said to have a potential to plough in as much as $23 billion to $73 billion into the Asian economy by 2030.

With mobile phone penetration increasing yearly and the number of Internet users increasing at 16 per cent annually, certainly there is much hope for Asia’s unbanked.

The only question is weather Australia will play any part in this opportunity on our door step, or we will continue to only invest in "property" which produces zero national wealth, for anyone other than speculators.

The opportunity is now, with the release of  the world first Global Block Chain Ledger technologies and infrastructure in Australian today. The only FinTech solution, exclusively protected by Hardware generated and protected next generation Elliptic Curve technologies,and yes, Hardware backed keys are provided free to the unbanked citizens, who wish to participate in the Public Block Chain Ledger.

Contact us, to be part of this exciting pathway, and help build a future for Australia, within the Global Digital World.

Get your secure Global Digital Identity, with Australian AML support today, and start to change the world for the better.

If you are an existing Australian Bank Customer, ask them about certifying "your" Global Digital Identity, as you already have gone thought the AML process once already, its time for you to take control over your Digital Identity.

Also see
Secure Global Digital Identity, for the Digital World
Identity Theft and Digital World
Free hardware generated and protected Bitcoin/BlockAuth ECDSA Private keys.
Decentralized Authentication
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