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...

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Main Authors:	Breza, Emily, Kanz, Martin, Klapper, Leora
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	FINANCIAL TECHNOLOGY FINANCIAL INCLUSION FINANCIAL CONSUMER PROTECTION LEARNING PAYROLL ACCOUNT
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

id	okr-10986-34939
recordtype	oai_dc
spelling	okr-10986-349392022-09-20T00:10:16Z Learning to Navigate a New Financial Technology : Evidence from Payroll Accounts Breza, Emily Kanz, Martin Klapper, Leora FINANCIAL TECHNOLOGY FINANCIAL INCLUSION FINANCIAL CONSUMER PROTECTION LEARNING PAYROLL ACCOUNT 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. 2020-12-17T15:05:35Z 2020-12-17T15:05:35Z 2020-12 Working Paper http://documents.worldbank.org/curated/en/273651607459575325/Learning-to-Navigate-a-New-Financial-Technology-Evidence-from-Payroll-Accounts http://hdl.handle.net/10986/34939 English Policy Research Working Paper;No.. 9495 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper South Asia Bangladesh
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	FINANCIAL TECHNOLOGY FINANCIAL INCLUSION FINANCIAL CONSUMER PROTECTION LEARNING PAYROLL ACCOUNT
spellingShingle	FINANCIAL TECHNOLOGY FINANCIAL INCLUSION FINANCIAL CONSUMER PROTECTION LEARNING PAYROLL ACCOUNT Breza, Emily Kanz, Martin Klapper, Leora Learning to Navigate a New Financial Technology : Evidence from Payroll Accounts
geographic_facet	South Asia Bangladesh
relation	Policy Research Working Paper;No.. 9495
description	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.
format	Working Paper
author	Breza, Emily Kanz, Martin Klapper, Leora
author_facet	Breza, Emily Kanz, Martin Klapper, Leora
author_sort	Breza, Emily
title	Learning to Navigate a New Financial Technology : Evidence from Payroll Accounts
title_short	Learning to Navigate a New Financial Technology : Evidence from Payroll Accounts
title_full	Learning to Navigate a New Financial Technology : Evidence from Payroll Accounts
title_fullStr	Learning to Navigate a New Financial Technology : Evidence from Payroll Accounts
title_full_unstemmed	Learning to Navigate a New Financial Technology : Evidence from Payroll Accounts
title_sort	learning to navigate a new financial technology : evidence from payroll accounts
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/273651607459575325/Learning-to-Navigate-a-New-Financial-Technology-Evidence-from-Payroll-Accounts http://hdl.handle.net/10986/34939
_version_	1764481975442210816

Learning to Navigate a New Financial Technology : Evidence from Payroll Accounts

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