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A New Perspective on Bill Payment—A Demand-Based Path to Financial Inclusion

By Amit Jain and Gidget Hall

Financial inclusion is seen as a key path to alleviating poverty by both developed and developing countries across the globe. Challenging the common definition of financial inclusion as a binary state that is achieved when all financial needs are met, this MasterCard study suggests considering it as a progression and a hierarchy of financial needs with higher levels of financial inclusion achieved as more needs are fulfilled.

Using the examples of India, Mexico and the United States this paper shows how integrating a demand side view of consumers’ financial needs with a product / supply side view of emerging payment products like Prepaid and Mobile represents a powerful strategy for bringing people into the financial mainstream. The high penetration, recurrence and size of bill payment make it particularly well-suited to the task.

1. MasterCard Advisors Analysis, 2011.

Adults Who Do Not Use Formal Financial Services

Source: Financial Access Initiative, 2009.