Banking, with fingerprints and house calls
MOBILE BANKING IN India isn't quite as simple as getting an ATM card and using it at the grocery store. It requires not only a new high-tech ID system, but house calls.
Hare Ram Singh, one of Basix's field agents in Harsh Vihar, pounds the pavement, block by block, to round up potential customers. He helps them assemble the documents they need to verify their identities and addresses, such as driver's licenses, electricity bills, food ration certificates, or voter identification cards. If these documents are not available, or if the address on them is not where the person currently lives, he'll visit the customer's home in person to verify the address. Of the 300 customers Singh has signed up so far, he has had to drop by nearly 250 of their homes.
Singh also helps the customers fill in a simple two-sided application form, since many of them can't read or write.
Singh and a colleague then set up a small kiosk along the side of the road, equipped with a laptop computer, a fingerprint scanner, and a digital camera. They enter information from the customers' applications into a database, take their photographs, and scan their fingerprints. But even this can present challenges: These slum dwellers are mostly manual laborers and their fingers can be so rough and worn that the scanner has trouble reading their prints. "So we have to take scans of all their fingers," said Preeti Sahai, the head of Basix's Delhi mobile banking project.
Singh visits each block in his territory at least once a week to allow customers to make transactions. He carries a phone and printer equipped with near-field technology developed by a Mumbai company called A Little World that allows them to send and receive data over short distances. First, Singh confirms the cardholder's identity with the fingerprint scanner and smart card reader. He then holds the card up to the mobile phone, which displays information from the customer's account. A customer tells Singh the amount of cash he wants; Singh enters this into the phone, and then hands over the cash. The card retains the memory of the customer's bank balance; the phone later uploads the transaction information to the bank's servers. If the service gets big enough, Basix may have to start sending a cash box and a guard, but for now Singh can usually cover any withdrawals out of the cash that other customers give him to deposit.
The services Basix offers are simple, and the average initial deposit in its mobile banking accounts is just 200 rupees (about $5). But eventually, Sahai said, Basix would like to begin offering loan repayments and other services, including possibly mutual fund investing, through mobile technology.
The Basix program is so labor-intensive that it is being run as a nonprofit. Basix is paid by its partner, Axis Bank, for each account it opens and each transaction it conducts. The hope is that eventually the aggregate deposits of the slum dwellers - as well as the opportunity to offer them other banking services, like loans - will make the project profitable.
In other countries where it has caught on, mobile banking manages to save money for both the customer and the bank.
According to consulting firm Booz Allen Hamilton, mobile phone transactions cost far less to process than even ATM transactions, meaning a bank can handle smaller value transactions profitably - a key factor in servicing the world's poor.
In South Africa, for instance, a domestic worker in Johannesburg who wanted to send money back to her family in another part of the country would traditionally have to take a taxi or a bus to a post office, wait in line, and then pay hefty taxes and fees. The Consultative Group to Assist the Poor estimates these costs could total $6 for a $14.50 transaction. To send the same $14.50 remittance through WIZZIT, a startup South African mobile banking service, costs just 43 cents. WIZZIT, for its part, saves money by not having to build branches around the country.
Jeremy Kahn
