Essay Example on Financial inclusion is a current concept that has Developed









Financial inclusion is a current concept that has developed from a triage of computer technology mobile devices and political mobilization by social advocates who seek to enhance economic prospects for the lowest income citizens in the developing world Financial inclusion allows people and businesses to access secure convenient and affordable payments for meeting daily needs and long term goals Visa 2017 For the two billion unbanked adults in the global population the introduction of electronic payments can become a critical tool to address issues related to poverty while also helping local merchants grow their business ventures Underserved and Overlooked 2017 Companies such as Visa are bolstering financial inclusion for marginalized communities through cutting edge digital initiatives that pave the path out of poverty and catalyze financial growth for destitute citizens Visa Inc operates the world s largest global consumer payment system with a reach of over 200 countries and territories across six continents Their cards are accepted at 46 million merchant locations are issued by 16 300 financial institutions and amount to more than 3 billion cards circulating worldwide Schiermann 2017 Visa s vast digital network is a powerful platform to advance financial inclusion on a global scale 

By bringing individuals into the formal financial system Visa fosters opportunities to strengthen economies worldwide Visa is combining its expertise in payments to combat poverty by fostering greater economic self sufficiency among low income individuals and communities Visa 2017 Mobile devices have been a major factor for encouraging financial inclusion through enabling the electronic transfer of money for business transactions and family payments in lieu of brick and mortar banking or cash Out of the two billion in the population one billion unbanked individuals have reliable access to a mobile device Zucarro Bridwell 2016 Visa s mobile network product mVisa is overcoming bank branch scarcity by helping people in lower socioeconomic areas such as India Kenya and Rwanda to initiate a transaction at any merchant with a Visa logo In 2011 Visa acquired Fundamo one of the most dominant providers of mobile financial services in emergent nations Visa leverages Fundamo s platform to offer enhanced functionality to existing mobile financial services subscribers throughout Africa Asia and Latin America Harnessing Fundamo s customer base and Visa s extensive network consumers in these areas are able to pay bills and perform branchless banking services from their mobile devices Zucarro Bridwell 2016 The Visa Direct program works in a similar manner to mVisa by allowing consumers to send money to Visa accounts across the globe If both parties hold a Visa card consumers can send funds to another person s Visa account transfer money to a reloadable prepaid card pay a Visa credit card bill and merchants can disburse funds to customer accounts for returns Underserved and Overlooked 2017 Visa debit and prepaid cards are currently in use by governments around the world to deliver a wide range of social benefits that provide for basic needs such as pensions food and fuel subsidies unemployment benefits disability assistance child support health services and educational scholarships For example the state of Nebraska began issuing the Visa Reliacard in 2004 for child support benefits Today 97 percent of disbursements from the Nebraska Child Support Payment Centre are done electronically either by direct deposit or prepaid debit cards Gosnell 2005

Additionally Visa partnered with the government of the Dominican Republic to provide social benefits to its citizens The Dominican Republic is a densely populated country with a large impoverished population that is heavily dependent on welfare benefits Because many eligible recipients are unbanked the government previously distributed benefits to its most poverty stricken citizens manually via trucks This process proved to be disorganized inefficient and expensive due to the lack of an electronic system and tracking record for those receiving benefits The central government and Visa collaborated to launch an initiative called The Solidarity Card by which prepaid cards were distributed to 5 000 of the poorest families in the country Zucarro Bridwell 2016 Visa installed more than 4 500 monitors at participating stores and local merchants for processing transactions using the cards The card was limited to use at participating locations and cash could not be withdrawn at ATMs The benefits of receiving aid in this way reduced corruption allowed better tracking of those who were receiving funds and stimulated the local economy by residents buying goods locally With the abundant success of this prepaid card program the Dominican Republic can now document and manage benefits distribution amongst its citizens to ensure optimal aid while reducing subsidy distribution costs Zucarro Bridwell 2016 Financial Inclusion seeks to improve the lives of the lowest income citizens by encouraging the shift from informal economies characterized by cash transactions towards more modern formal economies Through the aggressive utilization of technology Visa has provided comprehensive services that have transformed the lives of lower income families around the world

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