Branchless banking

Banks, traveling banks, ATMs, branchless banking... 

Banks, Travelit Banks, ATMs, and Branchless Banking. Banks, whether private or public, can be used to deliver safety net benefits in several ways. They can be used as a payment point where cash is issued to beneficiaries against a list of individuals or families. Banks can also cash checks and vouchers distributed to beneficiaries. Finally, they can maintain accounts in beneficiaries names in which welfare agencies or programs can deposit cash. 

Branchless banking promises to offer several solutions to the banking sectors constraints, but regulations pertaining to its use and the size of accounts and transactions are still being developed. In Brazil, for example, monthly transaction volumes (debits and credits) cannot exceed R 1,000 (approximately US 140) per customer. Clients are allowed four withdrawals and four account statements per month, and additional transactions are R 0.50 each. Deposits and balance inquiries cost nothing. 

Cell phones have also been used effectively to conduct financial transactions. Indeed, cell phones contain a smart card and can be easily connected over the network of branchless banks or to other telephones or POS remote devices. The amount of money that cell phones are allowed to carry is restricted, even though many people may have access to their own cell phone that they could use to access a financial institution that manages transactions. In the Philippines, special banking regulations allow people to transfer and hold small amounts of cash through cell phones. In South Africa, Celtel allows people to have a cell phone account and conduct transactions within the Celtel network (Porteous 2006). 

Lyman, Timothy R., Gautam Ivatury, and Stefan Staschen. 2006. Use of Agents in Branchless Banking for the Poor Rewards, Risks, and Regulation. Focus Note 38. Washington, DC Consultative Group to Assist the Poorest. 

Lyman, Timothy R., Mark Pickens, and David Porteous. 2008. Regulating Transformational Branchless Banking Mobile Phones and Other Technology to Increase Access to Finance. Focus Note 43. Washington, DG Consultative Group to Assist the Poorest. 

---