Betting on Chance in Colombia: How Game Network Operators Succeed in Providing Financial Services to the Poor While Other Networks Fall Behind

This paper explores the factors that motivate the inhabitants of Colombia to use game networks for conducting their financial transactions, despite mobile banking services being offered at no cost. The paper bases its analysis on an in-depth study of behavioral patterns of 21 street sellers in the metropolitan area of Medellin. Factors such as attitudes, practices, and strategies for earning, paying, saving, borrowing, and managing money were taken into consideration. Key findings include:

• Bank accounts are inefficient options due to the need to wait in line to deposit cash that needs to be withdrawn next day and may have hidden charges. On the other hand, game kiosks allow to send money, buy reloads, and make payments from the sellers workplace without the hidden costs and through a simpler process;
• Since informal workers dont have a steady income, they dont prefer to pay for services that have long-term commitments. Therefore, services need to be adapted to their income cycles, like buying a cellular phone minute, half an hour of internet time, or a dollar of energy, all of which are provided by the kiosks;
• Lack of meaningful benefits in formal savings institutions and the high penalties in formal credit institution drive the poor away from banks and towards informal services.