ABRA – Your New Personal Bank Without a Bank

Nowadays, we really do not know where technology is heading and where we’re going with it.  It has invaded most of our life.  From the time we week up and up until the time he would sleep, and even in some cases where we are sleeping, technology is always around us.

There are many places where technology has surpassed our wildest dreams.  Technology has reached one of those places where it is now overtaking our lives. One of those places is the bank where we have our cash and do transactions regularly.  It now looks like we would not have use for banks anymore if a new start-up has its way.

The new start-up that I’m talking about is called Abra.  If Abra has its way, all the banks in the world will become bankrupt and there would be no more banks left in the world.  What Abra plans to do is to have your money with yourself in your smartphone.

One of the major disadvantages of the bank is that it is not available at all places, most people cannot afford a bank account, and most people do not have proper documentation to open a bank account.

With Abra, people would be able to deposit their cash, withdraw their funds, and spend their money with the use of the app in their smartphones.  Abra’s service is different because it does not require bank accounts, like the services from PayPal, Simple, Chase Pay, and Venmo.

What Abra strives to achieve is that people should be able to send money just like they send text messages.

How It works:

1. Suppose you need money in cash. You then open the Abra app and find a bank teller near you. Abra’s bank tellers can be either regular people or retail stores.
2. Once you get the location of a teller, you meet them somewhere convenient. You and the teller then get a QR code, which is scanned to validate the transaction. Once the transaction is validated, you will receive your money.

For making a deposit, this transaction works just in the opposite way.

The teller makes a small amount by charging fees and Abra recommends that one charge 1.5% as fees depending on the location and the convenience of doing the transaction.  After makes 0.25% per transaction.  This is the only involvement of the company in your currency exchange.

The service that Abra provides is anonymous to the maximum extent, just like cash.  Only your phone number is collected and no other data is ever collected unless you want to become a teller.  Abra is in beta and would be launching in the Philippines and the US in the coming weeks.  The company has signed with many tellers in those respective countries.  Abra expects to launch its services next year throughout the world.

Considering that nowadays we are paying heavily on service tax in India (14%), this would be a welcome change for many people as it would provide banking services to many without the need for actually having a bank account.  This also presents hindrances and problems to law enforcement and government who are trying their level best to prevent felonious or hawala transactions.  

This service may also lead to black money trading is to become rampant and unaccounted cash can be moved from one place to another without much hindrance.  We will have to wait and see what type of checks and balances are placed to curb such menaces that may arise in the future.

What do you feel about the Abra service?  Do you think that this will be a big hit in India?  Do you feel that the government will be clamping down on services such as these due to black money being involved?  Should India adopt these types of services?

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