There’s massive evidence supporting the benefits of transitioning from cash to digital payments, but implementation is often difficult for governments to do on their own. This is in part because successfully creating an economy where digital payments are widely available requires a collaborative approach between many players in the public and private sectors.
A research done by Better Than Cash Alliance identified ‘accelerators’ or actions that regularly proved to make a strong impact in advancing the creation of economies where digital payments are widely available.
“The new McKinsey Global Institute study on digital finance for all should inspire emerging countries’ leadership to move quickly on creating economies where digital payments are widely available,” said DR. RUTH GOODWIN-GROEN, MANAGING DIRECTOR OF THE BETTER THAN CASH ALLIANCE. “We also released a study today that shows how governments and companies can rapidly shift away from cash. Building a digital economy can take significant work, but as the new data shows, it is completely achievable and will drive inclusive growth, helping people lift themselves out of poverty.”
These are the actions which can accelerate a country’s initiatives in order to save money, raise tax revenue, and increase opportunities for citizens.
- PROMOTE MERCHANT ACCEPTANCE INFRASTRUCTURE across micro, small, and medium enterprises to deepen usage among consumers.
- LEVERAGE EXISTING NETWORKS OR PLATFORMS TO DELIVER DIGITAL PAYMENT PRODUCTS AND SERVICES to extend digital payment services more quickly and in a way that lowers the cost.
- ESTABLISH A SHARED DIGITAL INFRASTRUCTURE FOR PLAYERS to reduce barriers to entry and promote innovation, both in public and private institutions.
- ESTABLISH INTEROPERABILITY(ability of different information technology systems and software applications to communicate, exchange data, and use the information that has been exchanged) to reduce barriers that confine digital transaction to a single payment platform to increase adoption and payments acceptance.
- DEVELOP A UNIQUE IDENTIFICATION PROGRAM that both public and private sector players can access to verify identities can drive digital payments and financial inclusion. Consumer protection frameworks are essential to ensure adequate privacy, security, and data control.
- DIGITIZE ROUTINE USE CASES that individuals frequently use for transactions can increase comfort with digital payments and increase digital transaction volumes.
- DIGITIZE GOVERNMENT PAYMENTS to advance a digital payments ecosystem by saving transaction costs and increasing civilian access to payments.
- DIGITIZE GOVERNMENT RECEIPTS to promote comfort with digital payments among individuals and businesses, and ultimately reduces leakages and boosts revenues. Collaboration with private sector is key.
- ESTABLISH REGULATION THAT PROMOTES INNOVATION AND RESPONSIBLE PRACTICES, by understanding the gaps and barriers of existing regulation, and engaging all stakeholders.
- IMPLEMENT POLICIES THAT INCENTIVIZE AND IMPROVE THE CONVENIENCE OF DIGITAL PAYMENTS to drive faster and more widespread access and adoption of digital payments.