Your Ideas Needed: The Grand Challenge of Digital Financial Inclusion

I have always had a belief in the power of ideas and how they can help change lives. It's what led me to create Innotribe, an incubator for the financial industry founded to promote collaborative, open innovation. It's what brought me to work at the Bill & Melinda Gates Foundation. And it's what can help tackle one of the greatest challenges we face: financial inclusion for those living in or near poverty around the world.

With this in mind, I am happy to announce the latest in the Bill & Melinda Gates Foundation's Grand Challenges Explorations series of grants - and the first aimed at increasing financial services and inclusion for the poor. The goal of this Grand Challenge is to increase the value of mobile for poor and low income people by enabling universal acceptance of mobile money among small merchants and service providers.

Today, billions of poor and low income people live outside the formal financial system - trapped in a cash-based economy that steals away their chance to build a stable future. With limited or no access to formal payments systems, a bad harvest, a serious illness, or even a positive event like the birth of a child can put families into serious financial stress and keep them mired in poverty.

The modern financial system does not work for the poor. But there is a different option - a digital financial ecosystem. Accessible, innovative digital financial products and services have the potential to help poor people across the globe fulfill their basic needs, make transactions cheaply and efficiently, and invest in their futures. Person-to-person digital transfers have already taken hold in a growing number of national economies in the developing world, helping to lower the cost and risk of domestic and international payments. However, the vast majority of transactions conducted by poor and low income people still take place using cash - including within the small merchant community, which, for the most part, still exists on a 100 percent cash-based system. Digital transactions are efficient and can be very low in cost, but we still have a long way to go until we see the wide-scale adoption of digital payments.

That's where you come in.

Specifically, we are looking for your ideas on how to promote universal acceptance of mobile money among small merchants and local providers of services to the poor - or to put it plainly, how can we make digital transactions as simple as they could possibly be? How can we enable local merchants, schools and health clinics to transition from accepting only cash to also accepting digital payments? If we can enable local merchants, schools and clinics to easily start accepting digital payments, it could have a major impact for financial inclusion across the developing world.

In my time at the foundation I have engaged with a diverse set of merchants and service providers who serve the poor in locations across Africa and Asia. The challenges they face in transitioning to a digital financial model cover a wide-range of issues, including:

• Business acceptance - cost of operation for the merchants, connectivity, support
• Usability - the system is safe and reliable, error-proof, easy and fast to use, clear, accessible to all people
• Technology deployment - easy to deploy in remote areas, easy to operate, standardized
• Social acceptability - mobile phones are not necessarily accepted in all social circumstances
• Ubiquity - wide availability

With such a complex issue, we understand that there will be multiple solutions addressing different aspects of the merchant experience. Because of this, we are looking for a range of innovative ideas that not only have the potential for real direct impact, but also can foster collaboration across a wide area, both regionally and internationally, to promote the widespread adoption of digital payments among merchants.

To learn more and apply, please visit the Grand Challenges Exploration website. The application process is short - just two pages - and can be done electronically. Approved grants will be awarded $100,000, and successful projects can potentially receive a follow-up grant worth $1 million. Grants are open to anyone from any discipline and any organization - after all, there's no limit to good ideas.

I believe in the power of ideas, and in the power of open innovation. But ideas can only change lives if you're willing to commit to them and see them through. Now, we need your ideas - and your commitment - to help empower billions in the developing world to take control of their financial lives and build brighter futures for themselves, their families and communities. Together, we can make financial inclusion a reality, and conquer one of the great challenges of our time.