15th February 2022

Poor families' financial situations are tremendously complicated, yet the tools they have to control their finances don't match up. People require economical, efficient, and secure methods of sending and receiving money, and this report demonstrates how this can be accomplished, particularly through digital transactions, which can save up to 90% on costs. Digital payment systems can potentially provide financial institutions with new revenue streams. Data from digital transactions, for example, can help providers better understand customer demands and tendencies, allowing them to develop new products and offer more appealing credit conditions.

A payment model that bases fees on a customer's activity have the highest possibility of reaching impoverished people on a long-term basis. As new technologies, revenue streams, and business models emerge, the potential for advances in payment systems grows. Access to cash will be crucial even when digital payments take hold, according to evidence from around the world. Payment platforms must include both a successful digital payment system and traditional ways for collecting and dispensing cash to adequately serve the poor. Only nations with extensive access to digital transactions (through a bank or a mobile money provider) attain high financial inclusion levels. We are optimistic as we see possibilities of improving the efficiency and accessibility of payment systems for the poor.

Helping Digital Finance Help People Escape Poverty

1) Make Sure Digital Technology Is Available To Everyone

Access to technology is becoming increasingly important in gaining access to economic prospects. Everything these days is done through mobile phones and the internet, from job searching to money management. Millions of people who do not have access to digital technology are at a significant disadvantage. Even among those who own a cell phone, the internet is less widely used. In India, for example, over three-quarters of adults have a mobile phone, but only a small percentage have both a cellphone and access to the internet. People in developing countries have been using mobile broadband more and more in recent years, but there is still a long journey.

2) Take Advantage Of Biometrics To Serve The Poor

One explanation for the world's 2 billion unbanked adults not having a bank account is that they lack the necessary papers to get one. Here’s a possible solution: adopting digital forms of identification, such as fingerprint or iris scans, to assist people in obtaining basic accounts. Women can also use biometrics to register SIM cards in their names, eliminating the need to rely on a relative's mobile. Biometrically enabled accounts are frequently easier to use. People who have trouble remembering long PINs, for example, may prefer fingerprint scans as an option.

3) The Private Sector Needs To Ramp Up Usage Of Direct Deposit

Major businesses paying electronic wages and large buyers paying suppliers straight into an account are likely the best opportunities to help disadvantaged people receive effective financial services. When it comes to digital payments, governments are far ahead of the private sector, and most wage employees in emerging economies are still paid in cash.

4) Treat Customers Fairly And Tailor Products To Their Specific Needs

Poor people will not profit from financial access unless accounts are less expensive and easier to use than other options. Some digital government payment recipients are nostalgic for cash due to shoddy products, claims of fraud, and poor infrastructure. Maintaining cheap services and promptly addressing consumer complaints would assist to build trust and attract new people into the formal banking system. Businesses must also recognise that not everyone's financial demands are the same. Women have different worries than men, and the dearth of products made specifically for women is one of the reasons why so many women are still unbanked. No matter how you assess it, one-size-fits-all techniques aren't going to help you boost the use of digital banking.

EVOLET Provides Employers And Unbanked Workers With Win-Win Financial Solutions

Companies all around the world employ global e-wallets for various positive reasons. Employers who pay their staff with cash face several challenges as their cash-based wages and lack of access to banking institutions introduce them to a plethora of problems. EVOLET is a global e-wallet that may address both parties' issues while also adding value to their lives. EVOLET is a safe digital wallet that offers several additional services in addition to traditional banking.

EVOLET’s Salary Management System

EVOLET offers easy to use tools to make your salary payment system seamless and efficient. Employers' wage management is handled by the application's built-in payroll administration system. Employers gain from a simplified process flow that incorporates quick reconciliation, backup, and record keeping. As a result, the risk of payment data loss is reduced, and human computing errors are eliminated. For all parties concerned, EVOLET's wage management solution makes it safer and faster. It removes the need for employers to withdraw funds from the bank, lowering the danger of robbery or theft. This is also true for employees who send money home to their relatives. Every month, this task can take up to half a day.

EVOLET is well-suited to two categories of workers: migrants and Malaysians who earn a modest income. In Malaysia, many migrant workers, both documented and undocumented, struggle to open a bank account. Because their countries have been red-flagged by Bank Negara, certain nationalities find it impossible to create bank accounts, even if they have work licenses and visas, according to Johnson Yu, the creator of EVOLET. Many migrants face a language barrier because they do not speak Malay or English. The EVOLET application has been transcribed into 12 different languages for ethnicities such as Nepalese, Bangladeshis, Filipinos, and Indonesians, who make up over 60% of Malaysia's foreign workforce.

Enablers Of A Cashless Economy

It is necessary to establish proper governance and operational structures. Establishing an overall organization to manage strategy and create alignment, as well as an operational committee to provide feedback and identify difficulties as projects go, are two examples.

1. Establish The Right Incentives

Consumers and merchants will be encouraged to explore transitioning away from cash through targeted incentives. This could be accomplished by lowering the cost of digital payments, imposing cash-handling fees, or prohibiting the usage of cash over specific limits.

2. Encourage Competition And Ensure A Level Playing Field

The increased cost of electronic payments is mitigated by competition, which naturally drives prices down and fosters innovation. Measures to enable point-of-sale solutions, as well as legislation requiring charge transparency, are likely to help. Governments can also actively encourage innovation. Some countries encourage or permit the construction of privately held payment rails to promote competition.

3. Provide World-Class Supporting Infrastructure

Infrastructure, which should include the internet, mobile and payment technologies, regulation, security, and electrical networks, is a crucial enabler of a cashless payment paradigm. Governments should support innovations that enable real-time interbank payments for retail transactions while also bolstering operations through new business and operating models.

Payment systems will develop as digital lifestyles become more prevalent and more individuals get connected globally. Consumers, corporations, and governments all stand to benefit, and e-commerce expansion demands a secure electronic payment infrastructure.

However, politicians and corporate leaders should not underestimate the hurdles after thousands of years of fiat currency. The solution should be a comprehensive one that includes the appropriate infrastructure, legal frameworks, technology, and a desire to collaborate and participate. The task is difficult, but the reward is faster development and a future-ready economy.

EVOLET is a digital wallet app for migrant workers.

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