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Only half of India has bank accounts: Study

Posted on Oct 08, 06:20PM | IBNS

On the heels of its ground-breaking partnership with the United Nations World Food Program (WFP) aimed at growing the WFP's game-changing digital food initiative, MasterCard released a study outlining a new hierarchy of financial needs that offers an innovative approach to addressing the worldwide challenges of poverty, hunger, and lack of access to basic financial services.

MasterCard released this report in advance of the convening of world leaders at the United Nations General Assembly and at the Clinton Global Initiative Annual Meeting in New York City at a time when both have financial inclusion on their agendas.

There are four major reasons discussed in this study as to why bill payments are well positioned to initiate financial inclusion and drive it forward - the large scale of bill payments; the potential for electronic bill payments to create value for all stakeholders; the ability to drive electronification of other payment categories; and the potential to achieve greater financial inclusion by accelerating lending.

To further advance this dialogue, MasterCard will convene government, NGO and academic leaders for a Global Financial Inclusion Day on Nov 1 in New York City.

India Highlights:

Only half the population has bank accounts

Roughly 15 percent of bills are paid online either through online banking or biller website*-options primarily available for the banked population.

For the unbanked population, the primary alternative to the biller's office is walk-in payment at a retail outlet using cash, but currently this accounts for less than 5 percent of the bill payment volume.

Mobile penetration is over 50 percent, rapidly growing and significantly higher than Internet penetration (15pc -25pc ), making mobile bill payment a potential longer-term solution.

T. V. Seshadri, Division President, South Asia, MasterCard Worldwide, said: "With 50 percent of world adult population still financially unserved, financial inclusion is seen as a key path to alleviating poverty by both developed and developing countries across the globe."

"This study illustrates how bill payments can be a potential path to financial inclusion, thereby transforming the payments and financial industry in India and across the world."

As part of MasterCard's ongoing commitment to financial inclusion, the company recently announced the following partnerships:

In India, MasterCard is involved with the government's Unique Identification (UID) project, an initiative to provide identification for each resident across the country to efficiently deliver welfare services.

MasterCard has become the first payment network to issue a license to a bank in Myanmar, paving the way for this country to move closer into theglobal family of nations.

The South AfricanSecurity Agency ("SASSA") started distributing social benefits in electronic form, eventually providing 10 million citizens with access to the economic mainstream.

MasterCard announced a partnership with The United Bank for Africa to accept and issue payment cards in 19 African countries that will benefit millions.

In Mexico, MasterCard is partnering with Banorte, the third largest bank, and Telecomm Telegrafos, to provide financial services to citizens in rural and underserved communities.

To ensure safe and timely disbursement of funds and to prevent fraud, in the United Arab Emirates, the Ministry of Labour requires agencies that arrange laborers for large contractors to transfer their wages electronically via MasterCard prepaid cards.

MasterCard (NYSE: MA), is a global payments and technology company.