Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion
- 1 May 2018
- journal article
- Published by American Economic Association in AEA Papers and Proceedings
- Vol. 108, 444-448
- https://doi.org/10.1257/pandp.20181013
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.Keywords
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