How Digital Financial Services Are Improving Quality of Life 

How Digital Financial Services Are Improving Quality of Life 

Have you ever gone to a restaurant with cash, just to find out it’s cashless? 

For those unbanked, the ability to have your currency accessible digitally provides a solution for many issues they can face. Most hotels require a debit or credit card, not cash, to book a room. Car rental companies also require a debit and credit card. By having a Mastercard connected with their digital Liquid Cash account, there is no need to worry about accessibility to common necessities. 

Though bank accounts can be hard to obtain in some areas, cell phones aren’t. Globally, more than six billion people have access to a mobile phone. This number includes at least half of the world’s unbanked population. However, for the unbanked consumers, financial services can be extremely exploitative. For services that don’t require the bank account to send and receive money, like Western Union, they usually charge large transaction fees. Even common peer-to-peer exchange services aren’t accessible to the unbanked, due to the requirement of linking a bank account. 

Data shows that the unbanked populations are most prevalent in Africa, Asia, and South America. Many of these citizens are unbanked because of lack of access. These citizens may lack the identification needed to obtain a bank account at a financial institution, or the financial institutions aren’t conveniently located. These issues can make finances even more difficult for individuals in these regions, who rely on payment from overseas. 

Thanks to the advent of blockchain technology, users without access to a bank account are able to have access to their finances, to be able to send and receive currency at the touch of a button. Blockchain technology helps users globally be able to send and receive the cryptocurrency. This would require no overseas transaction fees and allows for transactions to occur without the need for supplying identification documents that consumers may not possess. In a study done in Kenya, researchers found that when consumers had an unexpected drop in income, mobile money users did not reduce household spending—while the unbanked and users with poor access to the mobile money network reduced their purchases of food and other items by 7–10%. Liquid Cash uses this blockchain technology by providing a seamless way for users to send and receive cryptocurrency, easily accessible by just opening an app on their phone. 

References: 

ValuePenguin

The World Bank

Payments Journal

Nasdaq