

Digital money will include the unbanked - zhoutong
https://medium.com/@CoinJar/how-digital-money-will-include-the-unbanked-cf98fda1cfc7

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nowarninglabel
The problem is that many countries, especially the EU and US have strong anti-
money laundering efforts in place (stronger after 2001). Not to mention the
draconian banking laws in some places like Brazil and India. Further, the same
people who don't have documents to get an account are going to lack the
knowledge and access to use a digital service for banking. So, while this
optimistic approach to digital banking sounds nice, it doesn't actually work
well in practice.

Of course, there is a lot of hope for new mobile money, like M-Pesa, but even
with it the reality is fairly slow adoption rates. There's some good articles
on the subject via Microfinance Gateway, could dig them up if anyone is
interested.

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bernardlunn
check out the Unique identification Authority Of India which is successfully
tackling the most fundamental issue which is ID. key to success of M-Pesa was
the fact that your mobile number is your ID and your mobile minutes are your
fungible current account assets.

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zamalek
ePula[1] is already in wide usage up the east coast of Africa. It is a digital
currency that works with even the most basic cellphones.

South Africa as a different datapoint is mostly digital. I haven't personally
walked into my bank in 2 years.

With all that said, the thing that most people forget when they talk about
"transforming the developing world" is that the developing world doesn't want
your technology. The poorer classes in South Africa typically go to ATMs and
draw out their entire salary the very day that they earn it: they have
absolutely zero interest in banking services. The only reason they have a bank
is because their employer wishes to pay them via a bank. They want the
physical cash in their hands.

If you came to them and said, "here is a digital bank service" they would
likely pay no attention and rudely walk away, believing that you are some kind
of special idiot.

[1]:
[http://www.bankgaborone.co.bw/index.php?id=115](http://www.bankgaborone.co.bw/index.php?id=115)

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sly010
The reason so many people have no bank account is because banking doesn't
provide them anything. I understand what's in it for the service provider
(bank/wallet/lender/etc), but not everyone needs a credit card. My parents
live in Europe. They don't shop online, they don't take on loans and they
always pay with cash. The only reason my mom has a bank account is to receive
her salary, which then she withdraws because it looses value way slower under
the pillow.

It's not simply about being cheaper or having access. Many local economies
just can't make use of fancy global financial services.

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icebraining
_it looses value way slower under the pillow_

How so?

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sly010
In some cases returns on saving accounts won't cover the minimal handling fees
so you are loosing money. Talking about Hungarian banks and not a big salary
here.

~~~
icebraining
Oh, okay, fair enough. But doesn't she need a checking account anyway to get
paid? Would it be more expensive to just keep the money there instead of
withdrawing it?

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axanoeychron
Bitcoin is technically interesting and awesome. My problem with Bitcoin and
why it does not completely solve the problem described in the article - it is
a social problem.

Like land, a lot of Bitcoin is landed wealth. It has an inherent inequality in
who starts with it. This is what makes me uncomfortable with it. If you
transact two goods or services to obtain Bitcoin, that eliminates the
inequality.

For an unbanked person to obtain this digital currency, they would have to
provide services in exchange for BitCoin. They would have to 'serve' someone
else. A bit like land rent.

~~~
icebraining
Bitcoin miners provide a service in exchange for the bitcoins they receive,
too. The network can't work without mining. And there's no rent - the coins
only keep coming if you continue to provide that service, usually having to
invest money and time into new hardware.

It's a capitalist system, but it's hardly landed wealth.

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hiou
I ditched any large scale banking and contract, lease, debt arrangements over
7 years ago. I have a crappy no credit check bank card for online payments and
getting money transferred. I never sign a lease over month to month, no car
loan, no debt. I just buy liquid assets instead of sticking money in the back.
And I've never been happier. Being underbanked was one of the best decisions I
ever made.

I should add, this isn't some political statement about banks or finance, it's
more about simplifying my life and avoiding the debt vortex.

