Empowering People through Electronic Payments

B E T T E R THANC A S H A L L I A N C E

of other alliances, research centers and other groups that address particular policy goals such as financial inclusion, anti-corruption or women’s economic empowerment. This allows the Alliance to convene stakeholders to work together collaboratively on both the big picture and the pragmatic details of this one issue and make a real difference.

The Better Than Cash Alliance is proud of a successful first year. The Better Than Cash Alliance, with its cross-sector membership, is uniquely poised to catalyze change in the payments landscape and will continue its efforts to challenge governments, development organisations and private sector players to participate in the transition to electronic payments.

“The Better Than Cash Alliance is privileged to play a catalytic role in this rapidly growing movement toward electronic payments. We will continue to challenge the status quo and encourage market-based electronic payment solutions of all forms that will help communities — together with governments, private sector and development partners — achieve successful adoption of digital payments. The lessons and insights we have uncovered throughout the year are just a beginning, so we will continue to work with our members and stakeholders to digitize payments in a manner that empowers people and nurtures economies.”

— Dr. Ruth Goodwin-Groen, Managing Director, Better Than Cash Alliance

The Better Than Cash Alliance is an alliance of governments, private sector and development organizations committed to accelerating the shift from cash to electronic payments. It was founded in 2012 by the Bill & Melinda Gates Foundation, Citi, Ford Foundation, Omidyar Network, USAID and Visa Inc. The UN Capital Development Fund serves as the secretariat. The current funders include the Bill & Melinda Gates Foundation, Citi, Ford Foundation, MasterCard, Omidyar Network, USAID and Visa Inc.

To learn more, visit betterthancash.org and follow @BetterThan_Cash

Empowering People Through Electronic Payments

B E T T E R THANC A S H A L L I A N C E

Empowering People Through Electronic Payments

Empowering People through Electronic Payments Every year, billions of dollars in cash payments are made by governments, the private sector and development organisations to people in emerging economies, including millions of poor people. The Better Than Cash Alliance was launched in September 2012 in response to public and private sector demand for more strategic advocacy, research and guidance on digitizing these cash payments.

Experience indicates that shifting from cash to electronic payments can provide a pathway to a broader range of financial services, is generally safer, especially for women and girls and more efficient for low-income people. Additionally, electronic payments provide cost savings and transparency for governments, development organisations and private sector payers. Bringing about the shift to electronic payments on a global scale and ensuring that these benefits are maximised can be accelerated by an organisation dedicated exclusively

to providing global advocacy, knowledge sharing, collaboration and guidance on effective practices.

The Better Than Cash Alliance was created to achieve this purpose.

The Better Than Cash Alliance encourages governments, development organisations and the private sector to commit to the digital transition, and facilitates the translation of these commitments into action.

Specifically, the Better Than Cash Alliance: 1. Advocates for new commitments to transition the distribution of government benefits, humanitarian aid, and payroll and supplier payments by governments, private sector and development organisations — from cash to electronic 2. Provides the policy, technical and financial assistance needed to identify and implement the most effective approach for local market conditions 3. Develops cutting-edge research products, good practices and case studies in order to achieve scale globally

A YEAR IN REVIEW

LESSONS LEARNED

In the one year since its launch, the Better Than Cash Alliance has accomplishments to report and lessons learned to guide its work in the coming year.

Global engagement and research led to lessons that will inform future efforts of the Better Than Cash Alliance, including:

Advocacy

Ministries of Finance are often leading the decisionmaking on digitizing government payments, and in that process work collaboratively with the central bank and communications ministries. For Better Than Cash Alliance’s government members, the shift to e-payments is about creating a more efficient government that better meets citizens’ needs, and can lead to cost savings, transparency and financial inclusion. For this reason, a key learning is that most successful governments have minister-level leaders from finance, central bank and communications willing to work together along with technical-level staff who also collaborate.

• Secured 16 member commitments from governments and development organisations to digitize their payments (with more in process); • Led discussions at 31 events and conferences around the need for a transition to electronic payments, and how it can be done; • Organised eight special events including events during the World Economic Forum in Davos, the World Bank Spring Meetings, the SWIFT/Sibos conference and a high-level event at the UN General Assembly; • Communicated the benefits of the transition from cash to electronic payments through more than 100 global and regional media outlets.

Policy, technical and financial assistance • Tested pilot programs for the Technical Assistance Facility (TAF), including a peer learning exchange between high-level representatives of the governments of Kenya and the Philippines and a roundtable with representatives from African Ministries of Finance to develop an action plan which helps member governments and organisations increase the likelihood of success; • Initiated a responsible digital finance policy discussion with members and other stakeholders to ensure Better Than Cash Alliance activities incorporate client protection and appropriate financial capability.

Research, good practices and case studies • Published “The Journey Toward ‘Cash Lite’: Addressing Poverty, Saving Money and Increasing Transparency by Accelerating the Shift to Electronic Payments,” a white paper analyzing existing literature in payment digitization, identifying knowledge gaps; • Established the Development Results Focused Research Program (DRFRP) to create case studies and knowledge tools based on eight countries’ transition to electronic payments and global experience; the first results are compelling and will help build the evidence base and provide tools for all types of members in their shift to electronic payments; • Prepared initial case study on government payments in Mexico and country diagnostics in the Philippines and Colombia.

Cost savings and efficiencies achieved by shifting away from cash is the leading incentive consistently highlighted by private sector, government and development partners. While cost savings is just one of many benefits, everyone agrees that financial savings is the key driver. This is important for the advocacy and engagement efforts of the Better Than Cash Alliance.

Measurement of the degree of digitization across an economy is highly valued, and governments are ready to translate the insights into action. Our Development Results Focused Research Program (DRFRP) work indicates that up to now research has not focused on measuring the transition to electronic payments across an economy. The outcomes of the DRFRP will provide an evidence base for measurement and tools for capturing progress.

Many more governments were eager to participate

Committing Members in First Year Governments: Afghanistan Colombia (Department of Social Prosperity) Kenya Malawi Peru Philippines

Development Community: UNDP USAID World Food Programme ACDI/VOCA CARE Chemonics International Concern Worldwide Grameen Foundation MEDA Mercy Corps

than could initially be included, highlighting the ongoing demand for measurement, evaluation and action.

Because electronic payments leave a digital footprint and offer greater transparency than cash, there is an opportunity for the Alliance to partner to a greater extent with transparency and anticorruption advocates. The cash payments systems often allow for corruption and leakage. It is therefore natural that those benefiting from the status quo are likely to oppose the momentum to digitize payments. This creates an opportunity to engage with transparency’s advocates.

The unique format of the Better Than Cash Alliance is that it collaborates with a range of sectors and stakeholders on a single issue that addresses several policy agendas. No other organisation is working exclusively to catalyze the shift to electronic payments across stakeholders in a way that tailors solutions to the local market conditions. We complement the work