For many undeveloped or developing regions or countries, it is with large percentage of the population in rural areas. Most of these rural areas are inaccessible. Opening a branch in each village is neither feasible nor profitable. Moreover, the education or literacy level among the population of rural areas is also not very promising.It has always been a challenge to reach out to the underbanked rural areas. Opening bank branches is an expensive way of providing financial services
Branch less banking is the method of delivering banking services outside tradition bank branches. This could be done through agents and using communication technology. The hand-held POS terminals and users’ mobile phones are the main vehicles through which branch less banking services are delivered in unbanked rural areas.
With a smart POS terminal, branchless banking can involve:
1.Use handheld POS terminals’ fingerprint function or ID card identification function, to identify customers,realize mobile account-opening or transaction.
2. Use of outlets such as post offices and small retailers, that act as agents for financial services providers and that enable customers to perform functions that require their physical presence, such as cash handling and account opening.
3. Offer of at least basic cash deposit and withdrawal in addition to transactions.
1. For customers, they don’t have to run to the bank early in the morning, stand in long queues or wait for his/her turn with a token in hand. All they needs is a device, and an internet connection and banking transactions can be done within minutes.Ubiquitous outlets or financial providers helps them enjoy the banking services without going through the hassle of travelling.
2. For banks, it is less costly. There are an approximately 50% savings in cost when a bank moves to branchless channels instead of opening traditional bank branches. The saved cost can be utilized for various functions like launching newer products or reaching out to newer geographies.