Ideas & Updates

The Global Movement of Electronic Payments at WEF

At the World Economic Forum Annual Meeting in Davos, Switzerland, this morning, the Better Than Cash Alliance hosted a roundtable discussion with Juan Jiménez Mayor, Prime Minister, Republic of Peru; Dr. Mauricio Cárdenas, Minister of Finance, Republic of Colombia; and Florencio B. Abad, Secretary of Budget and Management, Republic of the Philippines.

The room was full of over 65 thought leaders from the government, banking, information technology, NGO, agriculture and consumer industries discussing the exciting global movement to shift the world away from cash to electronic payments.

The rich roundtable discussion led by The Economist’s Economics Editor, Zanny Minton Beddoes, introduced powerful themes on the benefits of shifting to electronic payments including transparency, cost reduction and inclusion in the formal sector in addition to the challenges such as infrastructure, financial education and regulation.

“Electronic payments are a powerful tool in development,” said Prime Minister Mayor. Currently four million Peruvians receive government payments and the government has pledged that by 2016, one million people will be included in the formal sector through electronic payments and financial education.

Secretary Abad added that “digitization of government promotes transparency.” One reason the Philippine government has maintained over 70 percent approval rating is because people see the benefit of directly receiving salaries and other government payments electronically and see how it reduces corruption. In 2010, the Philippines government had 800,000 social protection clients and now has over 3.9 million clients all receiving payments electronically.

Insightful thoughts about the benefits and challenges of making this transition were also shared by Ertharin Cousin, Executive Director, United Nations World Food Programme; Neal Keny-Guyer, Chief Executive Officer, Mercy Corps; Yawar Shah, Chairman of the Board of Directors, SWIFT; Marc Bichler, Executive Secretary, UNCDF; Robert Annibale, Global Director of Microfinance, Citi; Bill Sheedy, Group President of the Americas, Visa Inc.; and many others.

In response to an audience question about the role of governments in accelerating the pace of change, Dr. Cárdenas said, “Sometimes governments get in the way,” and shared Colombia’s plan to reduce financial transaction taxes for 1.5 million people who now receive social protection payments electronically which increases transparency and efficiency and decreases corruption.

We know that partnerships are critical to our success. Together, with our founding organizations, the Bill & Melinda Gates Foundation, Citi, Ford Foundation, Omidyar Network, UNCDF, USAID and Visa Inc., we are pleased to welcome even more partners to the Alliance that are dedicated to making this transition a reality.

Our newest partner is the government of Afghanistan who will join the governments of Colombia, Kenya, Peru and the Philippines, along with development organizations USAID, the United Nations Development Programme, the World Food Programme, Mercy Corps, CARE USA, Chemonics International and Concern Worldwide in a commitment to transition from cash to electronic payments. We hope many of our colleagues from the World Economic Forum will join us too.

Sharing the mission of the Better Than Cash Alliance with many of the attendees at the World Economic Forum has created even more momentum behind the movement to transition to electronic payments. With 2.5 billion adults—more than a third of the world’s population—excluded from the formal financial sector, we are determined to quickly move this transition forward making real progress in the year ahead.

Images from the event: