In the world of banking, finance and mobile services there is always talk of “the unbanked”, “los no bancarizados.” Basically, it means people who don’t have a bank account and therefore don’t operate within the formal financial system. They might work in the black, in the informal sector, and/or receive their wages in cash. Their transaction costs are always higher, because they cannot rely on internet banking or other quick ways of doing business. In Latin America, at least 50% of the population are outside the banking system. In Africa, mobile services have stepped in here and allowed people to transfer money, pay bills and carry out other transactions using a cell phone. In Latin America, it is still not very common, and many of the mobile financial services that do exist are being used by people who are part of the banking system. There are other services that try to cover the gap, but they don’t necessarily go to the root cause of the problem.
Anyway, I thought I’d give you a glimpse into the life of the unbanked – in this case, me! It is difficult to open a bank account here, even for people who have lived here their whole lives. Even with residency, the banks often want all sorts of proof of income etc. Seems weird, but, what can you do. So while I wait, this is what I do:
Bills: For my health insurance bill, I print it out and take it to a RapiPago, PagoFácil, or Pago24. These are billing payment services that you can use for almost all bills, such as cell phone, medical, gas, electricity and many, many others. You usually find them inside a kiosk. They have huge networks so you can find many of them all over the city. However, there is almost always a line – so go early or try to find one that is less known. These services are of course easier than going to a bank, but they are still time consuming (in many or even most, you line up on the sidewalk to wait) and still require that you go there with your cash. Also, many kiosks need to hire a person, or two, specifically to do payments, and the margins are very low, so it is not always very profitable for the agents.
Cell phone: I usually pay this at the actual Claro store, because it is convenient and there is hardly ever a line. Also, because my cell phone is not in my name, but rather a friend’s name – it was the only way to get a plan without having a DNI, the national ID number.
Rent: To pay rent, I have to go the bank of my landlady and deposit the money into her account. Because it is not a bill, it cannot be payed in non-bank agency. These kinds of deposits, without a bank card from that particular bank, can only be done in the bank opening hours, from 10 to 15. Great! Also, each envelope cannot hold the full amount of the payment, so I have to do two transactions. (The largest denomination is a 100 pesos bill…) There is usually a line but not too bad.
Internet shopping: I don’t really do that here, but at MercadoLibre, which both businesses and individuals use to sell their goods, you can often pay in cash – i.e. you organize with the seller to pay upon pickup. I have used it to find good prices (for instance on a printer) and then simply gone to the store to buy it. That avoids the commission to MercadoLibre as well.
General shopping: I shop less than I did in the US, and one of the reasons is that I never use a card here. So if I want something, I usually have to come back with cash later on.
Security: For big purchases, I use a money belt – may seem excessive but works for me. I never carry large sums of cash in my purse, and never keep much cash at home.
I don’t at all claim to know what life is like for the “real” unbanked, because I am simply unbanked right here, but I have acquired a certain understanding of the time wasted, the lack of convenience, and the security issues that they face. Also, Argentina seems rather behind on services for the unbanked. In Brazil, for instance, it is easy to get a pre-paid credit card for someone who doesn’t have a bank account, but not here. Hopefully it will get better soon!