Santiago Nuyoo in Oaxaca, Mexico, has less than 2,000 residents and no bank.
But it offers solid evidence that an unbanked community can still access financial services.
Under a partnership between the government-owned telecommunications company Telecomm -Telegrafos, Banorte (the country’s largest Mexican-owned bank) and MasterCard, Santiago Nuyoo now has easy access to a financial network.
Townspeople – who previously lived in a cash economy – can call a number, provide basic information and go to the local Telecomm Telegrafos office to get a prepaid card with a security code. The card is linked to the customer’s cell phone. They can receive payments on the account or use the cell phone to pay bills. They can also access their money at any Telecomm Telegrafos office or Ba-norte branch or ATM when they travel outside the town.
This “mobile wallet” program, called MiFon, is being expanded to other parts of Mexico, including large cities with unbanked and underserved populations. MasterCard says that since the system was introduced, the town uses 40 percent less cash.
In Argentina, MasterCard and Movistar (Telefonica) offer a mobile wallet service called “Wanda.” Under Wanda, which is also available in other Latin American countries, cell phone users contact a Wanda agent or Movistar office, sign up for the service and make an initial deposit in their new, password protected account. They then can make payments at any hour, and send and receive payments by phone.
Many banks, including Citi, work in partnership with telecommunications companies and a mobile payments processing company to offer prepaid cards and mobile financial services.
“We work with partners to reach unbanked segments of the population,” said Jorge Rubio, head of Citi microfinance for Latin America. “We also work with microfinance institutions in the area. They have a closer understanding… and help bring millions of new users to the financial system.”
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