Fintech For The Poor: Do Technological Failures Deter Financial Inclusion ?

80 Pages Posted: 6 May 2021

See all articles by Padmanabhan Balasubramanian

Padmanabhan Balasubramanian

Indian School of Business (ISB), Hyderabad, Students

S V Ravi Chandra

Indian School of Business (ISB), Hyderabad

Aditya Murlidharan

Indian School Of Business

Prasanna L. Tantri

Indian School of Business

Date Written: May 5, 2021

Abstract

We examine the impact of transaction failures on the working of a biometric-enabled payment system introduced in India to facilitate banking by the poor. On average, nearly one-third of transactions fail. However, the proportion of failures decline steeply with user experience. The usage of the system, especially on the intensive margin front, increases significantly with experience. Finally, using the revealed preference framework, we find that transaction failure does not deter the users from using the biometric platform. Further tests reveal that convenience offered by technology seems to score over other conventional banking channels, despite a high failure rate.

Keywords: Banking Correspondence, Household Finance, Digital Transaction, Aadhar, Financial Technology

JEL Classification: G28, D14, G21, G23

Suggested Citation

Balasubramanian, Padmanabhan and Chandra, S V Ravi and Murlidharan, Aditya and Tantri, Prasanna L., Fintech For The Poor: Do Technological Failures Deter Financial Inclusion ? (May 5, 2021). Available at SSRN: https://ssrn.com/abstract=3840021 or http://dx.doi.org/10.2139/ssrn.3840021

Padmanabhan Balasubramanian

Indian School of Business (ISB), Hyderabad, Students ( email )

Hyderabad, Gachibowli
India

S V Ravi Chandra

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India

Aditya Murlidharan (Contact Author)

Indian School Of Business ( email )

Hyderabad, Gachibowli 500 019
India
9650433150 (Phone)

Prasanna L. Tantri

Indian School of Business ( email )

Hyderabad, Gachibowli 500 032
India
9160099959 (Phone)

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