Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion
- (pp. 444-48)
AbstractDebit cards reduce the travel distance to access bank accounts and can increase financial inclusion. We show that in Mexico, cash transfer beneficiaries who already received their transfers in bank accounts and subsequently received debit cards reduce their median distance to access the account from 4.8 to 1.3 kilometers and report being less likely to forgo important activities (childcare, work) to withdraw their transfer. Using account level data, we find a strong negative correlation between the reduction in travel distance and financial activity: beneficiaries facing the largest reductions in distance increase both their number of withdrawals and their savings balances.
CitationBachas, Pierre, Paul Gertler, Sean Higgins, and Enrique Seira. 2018. "Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion." AEA Papers and Proceedings, 108: 444-48. DOI: 10.1257/pandp.20181013
- D23 Organizational Behavior; Transaction Costs; Property Rights
- E42 Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance