Secure Branchless Banking

Providing basic financial services to rural people can enhance their security by eliminating the need for them to hold cash and can offer them alternative venues for borrowing. Placing a branch in rural villages is not however cost effective. In recent years, the concept of branchless banking has emerged in which a person who has a phone and sufficient liquidity (called a shopkeeper hereafter) acts as a bank agent. Others in the village (hereafter called farmers) perform withdrawals and deposits with the shopkeeper. Because the farmers and shopkeepers may not trust one another completely and the possibilities for fraud are legion, some form of security is needed. Because the farmers are unsophisticated, the protocols must be simple and intuitive. We present such a protocol that is robust to dishonest shopkeepers, farmers, and eavesdroppers. The protocol assumes that at least the shopkeeper has a phone and that the farmer can read numbers and can converse. The protocol makes use of secret lists of numbers delivered on scratch cards. A similar protocol can be used for non-monetary transactions, e.g. to ensure that the proper drugs are delivered.