Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion

Pierre Bachas, Paul Gertler, Sean Higgins and Enrique Seira

AEA Papers and Proceedings, 2018, vol. 108, 444-48

Abstract: Debit 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.

JEL-codes: D23 E42 G21 O16 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/pandp.20181013
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Citations: View citations in EconPapers (39)

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