How cryptocurrency will enable financial inclusion

Chris Gorman OBE DUniv

Electroneum Director

Mobile | Technology | Money

A surprising concept perhaps, especially given the strong debate and divided opinion that follows cryptocurrency’s every move. I’ve watched with interest as the great and the good display similar passion to everyday subjects like football or politics. There are two definite camps to explore, with little crossover uniting the pros with cons.

In fact, you’d be forgiven for thinking you could be reading a movie script as daily headlines of crypto volatility persist, with focus on regulatory landscape, fraud, theft and some larger than life characters.

One aspect that sits entirely at the opposite end of that scale; on which everyone agrees, no less — from investors to entrepreneurs to regulators to politicians — and that’s the potential crypto has to contribute to solving one of the United Nation’s primary goals, namely financial inclusion across developing territories.

In her “Addressing the Dark side of Crypto” blog, Christine Lagarde, MD of the IMF, recently stated:

“The technology behind these assets — including blockchain — is an exciting advancement that could help revolutionise fields beyond finance. It could, for example, power financial inclusion by providing new, low-cost payment methods to those who lack bank accounts and in the process empower millions in low-income countries.”

Charitable organisations are also driving change:

“… a multi-stakeholder collaboration between Member States, civil society, the private sector, the scientific community, United Nations entities and other stakeholders… will adopt or review their financial inclusion strategies, … Cooperatives through their microfinance services can reach the moderate, vulnerable and part of the extreme poor whereas the usual commercial banks would only target the non-poor and wealthy clients.”

“Financial technology and digital financial services are revolutionising the way customers access and use financial services, opening the way for banks, insurance companies, payment companies and other financial institutions to serve millions of underserved customers. Yet globally, there are still 2 billion people who are “unbanked,” and at least 1 billion more who have an account, but use it only rarely or not at all. Financial institutions face a variety of hurdles they must overcome to achieve the long-term business viability and sustainability needed to expand and deepen their reach within this vast customer segment.”

Major progress has been made to address financial inclusion over the last 5 years, which has reduced the unbanked population from 2.2bn to 1.7bn.

The reality is, however, that blockchain has not yet played a major role, the success stemming instead from some smart Fintech companies; such as mPESA and WeChat.

So far, almost all blockchain solutions in the market do little or nothing to enhance the customer experience; they are static transactional currency exchanges.

Financial inclusion demands more innovation and participation; and so there are calls for review and action to effect change.

A statement from The Smart Campaign pretty much sums this up::

“The 2017 results suggest a need for the financial inclusion community to reconsider assumptions about the levers of change… Most importantly, we will need to think critically about what drives usage and how financial services offer value to customers.”

Current digital payment providers are lead by mPESA, with a successfully implemented payment solution in developing countries, particularly in Kenya, giving some solutions to the unbanked. They did this as a straight digital play, moving their focus to transactional hot spots with no digital solutions by essentially using airtime as a digital currency.

…the success of mPESA was ultimately about people management, not technology. Many innovations fail because management focuses exclusively on designing and launching a product. The true secret of mPESA’s success is the management of the agent network, which grew from 300 initially to almost 30,000 today.”

So why are 1.7bn people still unbanked?

The World Bank analysed why this could be:

The most common one [being unbanked] was having too little money to use an account. Two-thirds cited this as a reason for not having a financial institution account, and roughly a fifth cited it as the sole reason. Cost and distance were each cited by about a quarter of those responding to the question” Findex Report 2017

This rising issue has created a move towards collaboration, with a symbiosis forming between traditional banking, Fintechs, Opcos and other companies, no doubt partly driven by the potential value of unlocking this marketplace highlighted in PWC’s 2017 Global Fintech Report:

Mobile money services have proven to be an effective gateway for financial inclusion among the unbanked, a demographic that could evolve into a US $3trillion payments volume opportunity”.

CapGemini also added weight to the issue:

At a time when margins are under increasing pressure, operators and MVNOs are looking to recoup revenues through value added services. An area offering growing potential is the technology enabled by the financial sector — including micro-payments, loans and even full banking services.”

World Fintech Report 2018

Digital payment providers clearly need to broaden their perspective and explore more ways to serve these excluded populations.

So,what part is cryptocurrency set to play?

Cryptocurrency will play a large role in financial inclusion (bringing financial services to the poor), maybe more so than all micro-finance institutions together. Cryptocurrencies can bring a paradigm shift for the unbanked and bring forth a lot of technological, political and economic change.” says Exscudo.

The main benefits of crypto that clearly relate to these communities are the low/no fees, a decentralised global currency, and, perhaps most importantly, access for everyone, everywhere.

Having deeply immersed myself in the market for some time, I understand the various challenges, the diverse players, the wide ranging needs of the users — giving me a solid base to work on what is required for mass adoption.

What I see is needed, is a product and service system that meets all the demands of a complex market on a global scale.

• No-one is doing it.
• Less than 1% of the world have a crypto wallet.
• Crypto still doesn’t touch our daily lives.

I think I know why.

Perception management is a huge factor in making cryptocurrency a part of our everyday life.

Removing the barriers is the first step, giving a clear view of the benefits users stand to gain, and transparency across the business behind it, is crucial. It’s what I wanted to hear!

I got involved with Electroneum because it was a cutting edge, disruptive business and their ethos and vision resonated; a meaningful ecosystem that delivers liquidity and opportunity to local markets on a ged with my own.

I then heard of the potential for improving financial access for millions of underprivileged people in low-income countries, and I was in.

Much research ensued, which reinforced my belief that, to truly make an impact, crypto must be more tangible, more tactile; users need to experience the journey for themselves:

1. Getting access to crypto into people’s hands to use and experiment
2. Become part of the community of users and agents
3. Find ways to help people use and benefit

ETN has now transcended the traditional cryptocurrency landscape, and is now driving mass adoption of ETN as a mainstream digital currency within a holistic ecosystem.

Electroneum

A Mobile Enablement Currency

Driving mainstream integration is our most important objective, so we found a way to evolve and develop capabilities beyond the norm. The result is that ETN engages, educates and blends cryptocurrency into everyday life, creating comfort and familiarity amongst mass market users via a simple smartphone app.

We focus on 3 key areas:

Liquidity

• We have created an intuitive ecosystem connecting supplier to customer and mobile operator to end user
• We reward users for their engagement and advocacy by giving them up to $3 every month.
• This is funded from our unique adaptation of the traditional crypto mining model which makes cost savings that we use to fund the rewards.
• Partners also receive ongoing revenue in tandem with rewards earned by users.

Community

• Millennial Entrepreneurs
• The next generation of industrious young adults coming from developing economies.
• Agents
• These are the point of sale to many people in developing countries, the main reason the likes of mPesa have been successful.
• Mobile Operators
• The closest entity resembling a financial services provider that most developing nations encounter
• Fintechs
• Bringing benefits at ground level with more revenue generated for micro-finance, loans etc.

Usability

• Instant payment capabilities being launched; patent pending.
• Gig Economy
• We are enabling access to the vast resources found in Western economies.

ETN has created a powerful catalyst for mass adoption and loyalty

We reward users for their engagement and advocacy, by giving away free ETN currency, helping them earn regular monthly income.

• For low income families in developing territories, this has the potential to improve lives, with a $3 reward counting towards bill payments, important supplies or utilities
• In more developed nations, the drive is for new charitable giving, savings or treats.

Regardless, free currency rewards for everyone brings something good, making things a little bit better every day.

Here’s how our $3 model works:

ETN’s foundational communities of entrepreneurial and corporate partners, coming together to create and amplify a sustainable ecosystem.

The family of products and partners we’ve brought together to create this ecosystem, are intended to make a meaningful contribution to the territories we choose to launch in, and we’re driving our core capabilities of building communities, creating ongoing liquidity and driving usability, to make our model stand out alone in the marketplace.

We’re engaging with Millennial Entrepreneurs.

This approach helps drive usage of crypto across developing markets, where, these next generation of industrious young adults from developing economies are motivated and driven to succeed, they are looking to leapfrog the inherited poverty their families have endured and are hungry for the change that technology can provide in the developing world; especially connecting into Western markets.

ETN is a solution they can trust because

they’ll feel they can be part of it and introduce their peers.

The GIG Economy is set to benefit enormously too.

ETN fits perfectly into the ‘gig economy’, as we can offer a first for 350 million smartphone users — who remain unbanked in the developing world — enabling direct access to the vast resources of Western economies.

We are not providing banking facilities, instead we are opening a digital earnings gateway making it possible for these users to embrace the digital payment sector.

Simultaneously, Western economies gain access to a community of competitively priced, millennial entrepreneurs, who can grow and learn a new digital skill set, in the knowledge that they can sell their new skills via a global digital payment method.

Win, win.

We also work closely with mobile operators.

A primary part of our business plan is to partner with network operators.

Mobile operators are the closest thing to financial services that many users will ever know and their established billing relationships and direct communication channels play a critical role for mainstream integration.

Operators stand to gain tremendous benefits from extending their fintech capabilities to include digital currency.

Looking ahead to achieving financial inclusion

I believe that a complete solution lies in taking a collaborative approach, matching partners with opportunities and bringing together operators and vendors to best serve local economies. We work together to deliver innovation, convenience and income to truly fulfil market needs.

Getting this part right exposes massive potential

to claim a share of PWC’s forecast $3 trillion opportunity.

Another great thing about this combined strategy is that it also raises our game in terms of making a positive impact on financial inclusion for the huge 1.7 billion low income users who have no access to banking — it means we really can make a difference.

Where does Electroneum fit in to this?

Everything we do revolves around the ETN mobile app, which has been designed to deliver all our services, to all participants, using our mobile app platform. On a phased roll out, the core elements are:

• Reward and benefits: Free ETN payments enable users to try without risk creates viral growth.
• A positive user experience: to ensure we amplify the reward benefit, we provide an in-app user experience which is enjoyable, fun and fresh.
• Community focus: Our community will be our brand catalyst moving forward as we socialise everything we do; staying involved throughout the process.
• Utility: Demonstrates improving, evolving intelligence, offering greater utility and everyday benefits for end users by giving them their first digital payment solution.
• Payment: The app will be central to making payments in the real world, and as the end user gets more familiar paying with ETN, they will ask if they can “ETN IT”
• Wallet: Manage all transactions via the ETN Wallet, where all mined, earned and transferred ETN is stored. A super secure wallet is available too.

These all add up to a leap forward in the market, but there are a few other elements to ETN that may stand out for you. If you’re a fan of crypto-progressive details, it may be interesting to consider how we compare to everyone else:

• Unlocking Digital Markets We are connecting developed and undeveloped economies and delivering benefits for everyone; all serviced via the ETN mobile app, which also engages users and partners alike and rewards them for generating usage with free cryptocurrency.
• Break the habit We can provide viable proof that cryptocurrency can provide a viable, meaningful alternative to local FIAT ($£€) currency.
• Regulation ETN are currently going through a regulatory process. Regulated coins will address concerns over safety and give comfort around good practise and security.
• Drive usage We remove complexities and deliver an easy, rewarding experience
• Humanisation Build mainstream appeal by delivering meaningful, everyday opportunities to actually use crypto as a payment method via our varied scope of partners, current and potential.
• Improve Network Effect Create a collaborative ecosystem that delivers benefits and engagement for all.
• Instant Payments We have a patent pending for users and vendors alike to pay instantly, removing the current, long wait for a completed transactions

Our ecosystem looks something like this:

In our first 6 months;

Our goal is to make it simple and easy for anyone

to learn, earn and use ETN every day.

So we’re doing it.

Thanks for taking the time to read my article — much appreciated.

Best regards,

Chris Gorman

ETN The Mobile Enablement Currency

electroneum.com

Try it for yourself. Get your free ETN here.

• If you want to know more, please contact me on LinkedIn or by email chris.gorman@electroneum.com

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29 JUNE 2018