Agency Banking (or branchless banking) is a means for a traditional bank to cost effectively extend its branch network through the use of authorised agents. This enables the bank to provide low-risk services to customers in remote and rural areas that are difficult to service using traditional branches. The bank benefits through a larger customer base, boosting financial inclusion, product availability, and risk management.
The operation of Agency Banking is based on agents performing transactions on behalf of banked customers using a portable terminal (mobile phone, mobile EDC terminal etc.). These agents will have a stored value account (digital wallet) on the Novatti platform, and the platform will apply the defined business rules to transactions initiated by these agents. Customers can either have accounts on the core banking system, or a digital wallet on the Novatti platform, and the agent transacts on these accounts on behalf of the customer. The host system will apply the business rules for the customers’ accounts.
The platform allows agents to put cash into their wallets and get cash out of wallets using a broad set of business rules. Agents can use the service to transfer value from their stored value account to another stored value account, or a customer’s bank account. The transactions supported are:
- Cash deposit
- Cash withdrawal
- Merchant purchases
- Account balance queries
- Loan repayments
- Bill payment (utility bills, government fees, taxes, fines etc.)
- Prepaid top-up voucher sale
- Prepaid top-up (voucher-less)
Bank customers may also be issued with a magnetic stripe/chip card and a Bank PIN, and can then use this card and PIN to perform transactions. This requires the agent terminal to have the ability to read the data on the account card.
The primary benefits to the customer are security compared to managing cash, and convenience when compared to attending a traditional bank branch (the closest branch may be up to half a day’s travel away). The main benefits to the agent are driving increased foot-traffic through their shop or business, and the fee income created by handling the bank transactions.