A New Framework For Digital Money Innovation

The Financial Services for the Poor program at the Bill and Melinda Gates Foundation focuses on solving problems related to providing access to formal financial services for the world’s poorest. We believe that a critical part of the solution requires digitization of financial services in order to reduce costs, increase access, and help people move out of poverty.

A lady in a flower field takes a call on her mobile phone. A lady in a flower field takes a call on her mobile phone.
Photo credit: Nimai Chandra Ghosh

As a team based in Seattle, surrounded by both technology giants and startups, we often wonder how we can bridge the technology gaps between financial services in the developed world and developing world. Despite the dramatic differences we have in services and needs with those living in developing countries, we knew there must be some way in which all of the latest innovations in mobile technology and financial services could apply to less advanced markets.

Here in Seattle, most of our financial lives are digital: our income is born digitally into a bank account, we conduct the majority of our purchases with cards or sometimes our phones, and we rarely use cash. We are fortunate enough to have health insurance even though most of us have never walked into an insurance provider’s office. In stark contrast, the majority of people in countries like Bangladesh and Uganda manage small and unpredictable income streams entirely in cash and don’t have easy access to a wide variety of financial services. With the advent of new technologies, it is possible for mass markets in such countries to shift to digital, making it viable for providers to offer the range of financial products we often take for granted.

In order to advance our thinking, we developed a Digital Money Innovation Framework that helps us zoom in on a critical component of the value chain and organize our research and ideas in accordance with some of the biggest barriers we see in digitizing financial services for low-income populations. By developing this new framework and identifying innovative companies focused on a particular component, it became clear to us how innovations like Square can dramatically reduce hardware costs in Pakistan, or how a company called Jumio, which provides mobile imaging and ID verification technology, might reduce customer registration time in Bangladesh from 30 days to 30 seconds. We also learned from technology innovators in developing countries; Kopo Kopo in Kenya, a company developing efficient ways to onboard merchants to mobile money platforms, will likely be a model for acquirers seeking to integrate mobile money in the retail payments space.

We’re writing today to share this framework with others - both those from the nonprofit community as well as those working in the broader arena of technology and financial services – and to stimulate creative thinking about how innovative technology and business models could help deliver financial services to lower-income geographies. We believe there is a lot to learn, and we invite readers to join us on this exciting new journey.

To download the Digital Money Innovation Framework document and a printable 11x17 poster, click here:


----- Lynn, Mireya, and Megan are program officers, all in the financial services for the poor team at the Bill and Melinda Gates Foundation.

Sub-topics: Payments


14 June 2013 Submitted by Gregory Ubigen (not verified)

As one who is working to enable the aggregation of funds for agents, so that they are better enabled to serve different financial inclusion initiatives (banking, payments, remittance, insurance etc), I commend the efforts of the Gates Foundation team in helping to solve real problems of the poor in developing countries. I will be glad to know how what we are doing can be of use in other countries asides from our pilot country - Nigeria. Keep up the good work.

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