Learning to Navigate a New Financial Technology : Evidence from Payroll Accounts
How do inexperienced consumers learn to use a new financial technology? This paper presents results from a field experiment that introduced payroll accounts in a population of largely unbanked factory workers in Bangladesh. In the experiment, worke...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/273651607459575325/Learning-to-Navigate-a-New-Financial-Technology-Evidence-from-Payroll-Accounts http://hdl.handle.net/10986/34939 |
| Summary: | How do inexperienced consumers learn to
use a new financial technology? This paper presents results
from a field experiment that introduced payroll accounts in
a population of largely unbanked factory workers in
Bangladesh. In the experiment, workers in a treatment group
received monthly wage payments into a bank or mobile money
account while workers in a control group continued to
receive wages in cash, with a subset also receiving an
account without automatic wage payments. The results show
that exposure to payroll accounts leads to increased account
use and consumer learning. Those receiving accounts with
automatic wage payments learn to use the account without
assistance, begin to use a wider set of account features,
and learn to avoid illicit fees, which are common in
emerging markets for consumer finance. The treatments have
real effects, leading to increased savings and improvements
in the ability to cope with unanticipated economic shocks.
An additional audit study provides suggestive evidence of
market externalities from consumer learning: mobile money
agents are less likely to overcharge inexperienced customers
in areas with higher levels of payroll account adoption.
This suggests potentially important equilibrium effects of
introducing accounts at scale. |
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