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The UnBanked don’t need Banks!

UnBanked – They don’t need Banks!

 It's SIBOS!! For me this the best time of my year. I have been to 17 of the last 22 SIBOS’s. For some, their event is the Super Bowl, the Olympics or FIBA Basketball Championship or for many more it’s the World Cup, but me, SIBOS is my Super Bowl.

This year many people are talking about SWIFT falling behind, at the end of its life or just plain obsolete. I think that SWIFT suffers from the consortium of banks that are afraid of what the future needs. If they were to let SWIFT loose, SWIFT could easily be one of the most dynamic FinTech’s globally.

I am not here to talk about what SWIFT is or isn’t today as most are. I hear to much every day of new way banks and credit card companies can and want to help the unbanked.

I am not buying it. I have been spending time in Africa and South East Asia. People there do not use banks or credit cards, not because they are left out, but simply that they do not need to. Their economic community has done without banks, so who says they need banks now. I know many people that spout out about the unbanked are left out of the economy. They are not, they have a different system, so why force them into a system that will cost them fees they cannot afford to give up. Credit Cards are highly interested in the estimated 1.5 billion plus unbanked not as they say to advance them into to the world financial system. Their motives are strictly profits. For both the banks and credit cards they are living in saturated markets where literally they need young adults to turn 18 so that they can get new customers and make more fee and interest income. When they think about the unbanked, they only see what fee generation would be if they were able to bank everyone and put a credit card in each of those approximately 1.5 billion unbanked pockets.

What is so very sad is that we are talking about people whose income is between $50 and maybe $200 per month. The very idea that banks and credit card companies want to take 3, 4 or 5% from them is at least immoral and should be considered criminal.

It’s simple the unbanked need an inexpensive way (penny’s) to pay and get paid using a cheap phone that is quick and easy. The arguments ends there. There is no place for bank fees or credit cards interest rates. Not today, not ever, leave the unbanked with the ability to do without our costly financial system and give them technology that gives them a better way to survive that does not look at them as a source of new blood income as the banks and credit card companies do. We can help the unbanked but not by taking from them, maybe a SWIFTCoin is the answer.


Comments: (2)

A Finextra member
A Finextra member 01 October, 2019, 07:09Be the first to give this comment the thumbs up 0 likes

Have you read the extensive research done by the gates foundation on how banking can get people out of poverty? If not I suggest you do read it as there is a lot if evidence to counter your conjecture.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 02 October, 2019, 16:03Be the first to give this comment the thumbs up 0 likes

Great post! I'm glad mine is not the only voice in the wilderness on this topic. I called BS on the topic of banking the unbanked 5 years ago here when I saw a bank and a glorified pawnbroker in the same building in rural South India. Many of the presently unbanked go to loan sharks and blade companies not because they don't have a bank to go to but because of speed and greed, two things informal financial sector gives them and banks can't. 

That said, I've a slightly different take on Credit Card. In India, there are 1B debit cards but only 50M credit cards. There's definitely a huge underserved market for credit card. Cardholders in India rarely revolve their outstandings, so they don't pay any interest. Credit MDR is less than 2%. In the latest Union Budget, we heard about the new #ZeroMDR rule. There's some confusion on its applicability but it mandates 0% MDR for digital payments. So your assumption of 3-4-5% cost for credit card and the resultant immoral charge you make against credit cards are not true in India. As a matter of fact, banks are NOT pushing credit cards so much. (On a side note, 24/7/365 realtime bank-account linked digital payments driven by UPI are quite popular in India e.g. Google Pay, PhonePe, PayTM. They charge no fees to Customer and <0.5% MDR to Merchants).  

Chris Principe

Chris Principe


APB, Inc.

Member since

15 Nov 2008



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