Report

Increasing use of digital payment applications among vulnerable populations

Divya Nair , Sonakshi Sharma , Ishita Batra 20 September 2020

This brief describes the challenges faced by female migrant workers in using digital payment applications.It describes results from an experiment to study the effectiveness of training on increasing the use of digital payment applications by these workers, particularly for remittances.

The experiment tested the effectiveness of two types of training in improving usage of digital payment applications. We tested a classroom-based training and a more intensive individualized-training model. Results indicate that training is effective at addressing knowledge barriers, but only nominally increases the use of digital payment applications. Usage remains low because migrant workers are not able to meet certain infrastructure requirements.

To increase the use of digital payment applications, knowledge barriers, as well as infrastructure requirements (such as access to smartphones, reliable internet connection, and phone number-bank account linkage), need to be addressed. It is also important to be mindful of the additional support vulnerable populations may need in fulfilling the requirements for conducting digital payment transactions. For detailed recommendations, refer to “Recommendations” on page 7.

Recommendations

Digital payment applications are not easily accessible to all those who stand to benefit from them. In addition to knowledge barriers, infrastructure requirements can exclude parts of the population. Some of this exclusion is systemic. For example, gender-based differences in access to the infrastructure needed for using these applications result in fewer women being able to use them – in India only 38 percent of women own mobile phones, compared to 71 percent of men. Another excluded population is feature phone users (in 2019, only 44% of phone users in India had smartphones) as there are few user-friendly digital payments solutions for feature phone users. The needs of these excluded subpopulations need to be identified and addressed. This is particularly important today as the expected expansion of usage of digital payments can exacerbate existing gaps and further exclude already marginalized populations.