That the tools and technology are readily available to those who are in need of inclusion demonstrates that this is a solvable problem and one that partnership, education and innovation can easily solve.”
Mastercard’s research into those who are financially excluded across Europe, found a third (33%) are employed full time and 35% are aged 18-34. Surprisingly, 87% of the financially excluded people surveyed have lived in the same country their whole lives. The findings also revealed that 38% pay their rent in cash and, incredibly, 88% of those surveyed pay for all of their other amenities in cash.
However, among this same section of society, the research uncovered a vastly increased proliferation of technology. Access to technology via smartphone usage has significantly increased, from 29% in 2013 to 49% in 2016. Yet, a quarter (27%) still find they are unable to access financial products and services, highlighting a definitive disconnect between those using technology and those accessing financial products and services.
A constant need to rely on cash leaves these people extremely vulnerable to loss or theft of money, payment disputes – as there is no electronic trail or proof or purchase, and a complete inability to prepay or schedule payments ahead of time. This section of society may then seek unsuitable, alternative payment methods, due to cash-flow issues, which can lead to debt.
The research suggests the main reasons behind the absence of a full bank account or banking services are a lack of knowledge, and mistrust of the banking sector. A fifth (20%) do not want a bank account at all and a further 10% say they do not trust banks with their money. Together with innovation and education, digital prepaid solutions and electronic payments can help to bridge the gap between technology and financial services.