For the rural poor -- especially women -- accessing formal financial services is nearly impossible. Few have formal identification needed to open an account; others lack a stable job or collateral needed for a loan.
Three years ago I blogged "Is Financial Inclusion Imminent in India?" I have just returned from India after observing the progress India has made towards financial inclusion. Yes, there has been progress, but much remains to be done.
You may have seen it. You're standing in line at McDonald's, Starbucks, Home Depot or a local store, and the person in front of you waives her phone at checkout then walks out with her stuff. No cash, no card, just a waving phone.
There is growing hype over more and more people replacing their wallets with their smartphones. It sounds very convenient, but even with some six billion people worldwide with a cell phone, it is unlikely that there will be a quick transition to digital wallets.
Over the past few months, a dizzying array of announcements about mobile wallets have been made leaving many industry insiders scratching their heads as to how, and more importantly when, the benefits will extend to the consumer.
Whether promoting digital money, mobile payments, mobile banking, prepaid or a mobile wallet, one thing is certain: the lack of consistency in terminology and the vagueness typical of early product releases has made the task of distinguishing all the more difficult with each new announcement.
Over the next five years paying with your phone will become as commonplace as paying with cash, which is why every man, his bank and his phone company are in the battle to win the mobile wallet space. So who's going to win?