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A Day in the Life of the Unbanked Consumer -- And How Mobile Can Help

Mobile payment technology is safer than storing your money under the mattress.


For most Americans, conducting simple, routine bank transactions throughout the day can easily go unnoticed. Depositing a check or withdrawing cash from an ATM is as central to daily life as going to the grocery store. However, you don’t have to travel too far outside of your day-to-day activity to encounter individuals who are “unbanked,” whether they chose to manage their own finances without a bank, or they are too limited by poverty or distance for banking to be realistic.

In the U.S., there are 68 million Americans without access to a bank account or debit card — roughly 22 percent. But when it comes to mobile phones, there is no shortage in the U.S., with nearly 90 percent of American adults in possession of a mobile device. Worldwide, there are 2.5 billion unbanked individuals. However, nearly 85 percent of the global population, about 6.8 billion people, has access to a mobile phone.

Pause to think about those numbers and let it sink in: More than one third of the human race are considered unbanked, by choice or out of necessity; yet, at the same time, there are just about as many cellphones on the planet as there are people.

This presents a tremendous opportunity for mobile payment technology to bring the financially excluded into the economic mainstream. Mobile payment technology eliminates the need for direct access to a bank or credit union, and for the billions of unbanked people worldwide, using mobile payments is often more convenient and costs less than other methods of money transfer. Not to mention, mobile payments are available on the majority of the devices many people already own, including the most basic types of SMS-only feature phones.

To fully understand the effect that mobile payment technology is having on our world, let’s take a look at a day in the life of individuals who are oceans apart but have one thing in common: No bank account.

United States

Peter has a pretty good job, and would be considered a part of middle-class America, but since he has been hit hard with bank overdraft fees, hidden interest rates and ATM fees, he decided that a bank account wasn’t for him. Now, at the end of every month he has to take out five separate money orders to cover all of his finances — rent, electricity, cable, financial help for his family a few towns over, and his cellphone bill. Since Peter abandoned his bank account, when he receives his monthly paycheck, he is required to pay a hefty check-cashing fee just to get his hands on his own money. In the beginning, Peter thought he was making a wise decision by choosing not to have a bank account, but has quickly come to realize that being unbanked doesn’t come without a cost.


Although Camila resides in the city of Sao Paulo, she comes from indigenous roots, and the majority of her family lives in a remote, rural village where they live off the land. Camila isn’t able to visit them as often as she’d like, but she does send money back home to her family whenever possible. Since her family has no physical mailing address, Camila entrusts an envelope of cash to an acquaintance of hers, Felipe, who frequently travels to remote villages to transport farmed goods. Occasionally, the money never makes it to her family, as a result of theft, or simply because Felipe wasn’t able to make it to the village. With no bank, no car and no public transportation options in the rural community, Camila’s options are slim.


Fadhili’s family runs a local bicycle shop in Kitisuri, a town just outside of Nairobi. The shop is powered by M-Pesa, Kenya’s mobile payments platform that has become the predominant means of money transferring in the country. Bike sales have soared ever since mobile adoption, and M-Pesa rapidly spread throughout the region. Before M-Pesa, Fadhili’s family frequently had to turn down business, because many of their customers didn’t have a bank account or enough Kenyan shillings on hand to purchase a bike. Now, making secure transactions has never been easier, and Fadhili’s family has noticed an increase in rural villagers’ mobility, due to bicycle transportation and M-pesa’s wide use and acceptance.

Kenya is leading the world in mobile money, with more than 18.2 million active Kenyan customers relying on the M-Pesa mobile payments platform. In fact, users of Kenya’s M-Pesa now send money totaling 20 percent of the country’s GDP to each other each year via text message. Kenya serves as a shining example of the incredible impact mobile payments can have on individuals, communities and economies at large. While we may think that the U.S. is leaps ahead of a developing country like Kenya when it comes to mobile payments, the truth is, the majority of money transfers in the U.S. — upward of 80 percent, according to some estimates — are taking place domestically. The U.S. is in need of an effective P2P transfer system just as much as Kenya was before M-Pesa.

As we continue to see a shift away from traditional financial institutions and toward financial freedom, here are four practical ways to extend mobile payment technology to the unbanked around the world:

  • Paper or plastic: Prepaid debit card adoption is on the rise — Mercator expects that by 2015, $168.4 billion will be loaded onto these cards. Prepaid plastic cards function as a debit card that is not linked to a traditional bank account, and can be purchased from retailers such as local grocery stores and online merchants. Interestingly, the prepaid plastic card is beginning to serve as an entry point into mobile payments.
  • From remote village to urban city: Mobile payment technology makes sending money to people’s family members in real time, across borders, a reality. Transferring money through a mobile device eliminates the risk of it getting lost in transfer, and is overall a faster and more efficient means of moving money from one place to the next.
  • Managing finances: With mobile money technology, it’s becoming easier than ever to manage finances. Checking balances, paying bills and setting aside money for savings can all be done in one place — your mobile device — with no need for a bank teller or ATM to complete these transactions.
  • Safer than storing money under the mattress: One of the reasons mobile payments is proving to be successful is through the added layer of security. Mobile payments services, like Kenya’s M-Pesa, allow people to turn cash into money credits, eliminating the need to physically store one’s entire cash collection.

  • Michael Liberty is the founder of Mozido, a global mobile payments platform provider that is in the process of unlocking financial freedom for about two billion people. Mozido’s secure, cloud-based technology delivers payments and loyalty solutions to companies in retail, financial services, consumer packaged goods and telecom that serve both banked and unbanked consumers via the mobile phone. Reach him @Mozido.

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