all lives have equal value - wsbi-esbg lives have...all lives have equal value ... digital payment...

An Introduction to Financial Services for the Poor

Janine Firpo, Deputy Director

September 2015

ALL LIVES HAVE

EQUAL VALUE

© Bill & Melinda Gates Foundation | 2

BMGF Global Reach and Presence

1,2002012 active grantees

~1,200Employees worldwide

US $3.6B2013 grant payments

Ethiopia

Europe and

Middle East Office

ChinaWashington, D.C.

India

Nigeria

South Africa

Seattle

US $40 BAsset Trust Endowment

TrusteesBill & Melinda Gates,

Warren Buffett


GLOBAL HEALTH

Discovery & Translational Services

Enteric and Diarrheal Diseases

HIV

Malaria

Neglected Infectious Diseases

Pneumonia

Tuberculosis

GLOBAL DEVELOPMENT

Agricultural Development

Emergency Response

Family Planning

Financial Services for the Poor

Global Libraries

Integrated Delivery

Maternal, Newborn & Child Health

Nutrition

Polio

Vaccine Delivery

Water, Sanitation & Hygiene

Reinvent the Toilet

U.S. PROGRAM

College-Ready Education

Postsecondary Success

Washington State

EVERYONE BENEFITSThe Gates Foundation believes that

from an economy that includes everyone.

BILLIONS ARE EXCLUDEDfrom a formal economy.

Yet today


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Why Digital?


• The economics of traditional transactions don’t work at scale - for providers or the poor

• Payments are a universal need for all people, including the poor

• Digital channels are much less expensive than alternatives

• The design of digital payment systems – the decisions made upfront – determine the cost

The economics and other barriers require a new, digital financial system that is inclusive & sustainable


Key observations

To help poor people move out of

poverty and stay out of poverty, we

seek to:

• Generate economy-wide ef f iciencies

by digitally connecting all people to

the f inancial system

• Reduce the amount of t ime and

money that poor people spend to

conduct f inancial transactions

• Increase poor people’s capacity to

smooth cash f lows, weather f inancial

shocks and capture income-

generating opportunit ies

Our Objectives

Focus countries : Bangladesh, India,

Indonesia, Kenya, Nigeria, Pakistan,

Tanzania, Uganda


Stages of Market Development

EnablingEnvironment

Digital Payment Platform

Digital Payment Ecosystem

High Impact Digital Financial Services

Basic Connectivity

Critical mass of mobile coverage and penetration amongst rural poor

1Enabling regulations that support poor people to open accounts and providers to outsource distribution, and to protect users

2Poor people adopt and use low-cost digital systems for P2P and basic transfers.

3Poor people get money, spend money, and conduct a majority of financial transactions digitally, including proximity payments .

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India

Nigeria

Indonesia

Pakistan

Tanzania

Uganda

Bangladesh

Poor people adopt and use digital to move out of poverty and stay out of poverty


Enabling EnvironmentResearch and

Emerging TechnologyLevel One Project Ecosystems and Services

FSP is Organized Across 4 Initiatives


Enabling EnvironmentResearch

and Emerging Technology

Level One ProjectDigital Ecosystems

and Services



The Level One Project





and Services


Retail and Commercial

Banks

Retail, Commercial

and Settlement

Banks

Central Bank

Card Networks

ACH

RTGS

National Digital FinancialService System

Interoperability Service for Transfers

Fraud and Risk Management Service

Agent and Merchant Account Management

Digital Financial Service Providers

Account Opening Service

Consumer Account Mgmt.

Digital Financial Service Providers

Account Opening Service

Consumer Account Mgmt.

Agents

Lower Income Consumers

Small Payees (Merchants,

Schools, Clinics)

Large Payees (merchants,

utilities, hospitals)

Higher IncomeConsumers

Large Payers (Governments,

NGOs, Employers)

Agents

Lower Income Consumers

Small Payees (Merchants,

Schools, Clinics)

Large Payees (merchants,

utilities, hospitals)

Higher IncomeConsumers

Large Payers (Governments,

NGOs, Employers)

The Level One Project Framework

- Open-loop interoperability between providers

- Immediate funds transfer and same day settlement

- A push payments model

- Adherence to well-defined and adopted international standard and open application program

interfaces (APIs)

- Adequate system-wide shared fraud and security protection

- Efficient and proportional identity and know-your-customer (KYC) requirements

- System level transaction irrevocability


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The Level One Project Design Principles



Digital Ecosystems and Services





and Services



Four Pillars of Next Generation DFS Strategy

© Bill & Melinda Gates Foundation |

Inclusive Growth Usage and Impact MetricsEcosystem Development High Impact Digital Financial Services

Catalyze the development of key ecosystem building blocks that pave the way for a wide portfolio of digital financial products for our target consumers

Drive growth of existing digital financial services by combining the best of human-centered design with data-driven growth analytics to the entire customer experience

Explore the digital financial services that deliver positive impact at the household level and have the potential to achieve significant scale

Develop metrics that move beyond access to adoption, usage, and impact

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Thanks to the rapid rise of

DIGITAL PAYMENT SYSTEMS…and the ubiquity of

MOBILE TECHNOLOGY…

WE HAVE THE POWERto change this inequality.



ACTA Model – a range of models can make money

THANK YOU


all lives have equal value - wsbi-esbg lives have...all lives have equal value ... digital payment...

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