Having a bank account, or: why being unbanked should not be an option

Joerg Blumtritt

25 January 2018

Living and working in Europe, one might underestimate the relevance of participating in international banking. Globally, over 2 billion people have no or limited access to financial transactions. This must change. As a young person, when I was traveling through Europe, there were no Credit Cards (the Europeans with exceptions of the British were very late in adopting cashless payments). When I needed money, say in Italy, I had to go to a bank or the post office and cash a check. I had to write out several forms, my passport would be manually copied, all in all the procedure would take about 30 minutes and the fee was something like 5 Euros. What for me was just a small nuisance- at home I would go to my bank’s atm with my debit card or wire money directly from my account - is representative for the daily life of about half of the world’s population. About three billion people don’t experience the comfort of current accounting with all the cashless payment services, while two billion people have no access to banks at all. Being Unbanked Isn’t An Option Not having a bank account for your current financials is much more than just an inconvenience. It is also more serious than just affecting peoples private lived. It literally keeps people outside the economy. Having to pay every invoice immediately in cash, or respectively, having to get all your income in cash, too, clearly limits the dimensions of doing even small business. Nobody will give you a credit line either, except friends and family, so every move that a business makes, has to be covered with funds upfront. All raw material, all tools, all rent and wages for workers cannot be balanced against the expected cash flows. To do business, people have to hold reserves; and in cash, unprotected, easily lost, stolen, or worst -robbed. A different, however related problem with a cash-based economies, is taxes. I am aware that many of ultra-libertarian celebrities of the blockchain world acclaim “tax is fraud”. I don’t want to discuss this. I am convinced of the necessitiy of collecting taxes to maintain public goods and services. But even if I would think differently, I would still have to acknowledge the fact that for the time being, states will continue to enforce getting their refenues. Collecting taxes in a cash only economy however requires much more direct control. Like in the old days, you need tax inspectors continuously sniffing arround your physical business. This is inefficient and often unfair, and leeds to huge problems of corruption. Despite all criticism, the western banking system has proven an essential part to foster economic growth, and sustaining stable, prospering societies. To make the virtues of banking accessible to all means to open up the chance for many to participate in the global economy. RAAY is our solution to bring banking to the unbanked.