Three weeks ago at the World Economic Forum, representatives from the Better Than Cash Alliance spoke to the crowd in Davos. This organization, funded by the Bill & Melinda Gates Foundation, focuses on increasing the popularity and effectiveness of electronic payments, and eliminating cash.
Here are 5 reasons why electronic payments are better than cash:
1. Electronic Payments are More Transparent
According to the Businessweek article on the same topic, there is
“Less corruption and theft when payments can be easily tracked. In Afghanistan, U.S. aid agencies use it so workers aren’t so vulnerable to robbery.”
2. Electronic Payments are More Secure
Money goes where it is supposed to go, it can be tracked there, and it can get there on time without robbery on the way.
3. Electronic Payments Accelerate Financial Inclusion
According to the same Businessweek article,
“Electronic payment is a way for unbanked people to establish a record of on-time payment of their bills. This can be an “on-ramp” for them to get other services, such as loans.”
4. Electronic Payments Can Save Money and Lower Costs
Moving money around is much cheaper as an electronic than as a physical product. However, many countries now only have access to cashless networks that charge high fees – this must change. The Gates Foundation Initiative “Financial Services for the Poor” and CGAP, along with many more, are working on this challenge. And here is a video from Opportunity International showing the increase of access to Financial Services in Africa
5. Access to New Markets
Along with access to capital and access to talent, access to new markets is a key driver of economic progress. Services that allow for electronic transfer of money allows for people to reach and extend into new markets, and allows new markets to reach them.