The Better Than Cash Alliance is an organization of national governments from Africa, Asia-Pacific and Latin America, global brands within the agriculture, garment and fast-moving consumer good sectors, UN agencies and NGOs.
They consider that: ‘Governments, businesses and people are looking for a better value proposition than cash to improve efficiency, transparency, security, women’s economic participation, financial inclusion and inclusive growth’.
You might expect the Alliance to be ‘anti cash’. In fact, they take a balanced approach.
“We do not want to abolish physical cash, but rather ensure that people have choice in how they make and receive payments.”
We’re aligned with that view. And we’re also interested to see they describe migrating salary payments from cash to digital as having ‘the potential to improve the lives of people on low income’. This is fundamental to our thinking too.
Why? To start, the hundreds of businesses using our dopay for business virtual banking platform today can pay any amount in wages, digitally. Their employees don’t have to earn a weekly minimum. And they don’t have to open a bank account to benefit from electronic payment – an option that’s very unlikely to be offered to lower-paid workers anyway.
Once they are being paid digitally, they still have total choice over payment methods. They can use their pre-paid dopay card to make electronic purchases. And they can access the wages loaded onto it by their employer at any ATM in our initial market of Egypt.
This choice reflects the Better Than Cash Alliance thinking that, ‘we do not want to prevent people from using cash as sometimes it is the best or only payment option.’
Employees paid via dopay for business can choose every time whether they make purchases with their dopay card or use it to withdraw wages and then use cash.
Many shops and markets still only accept cash for food and other necessities. And many employees prefer to have cash available to make gifts or loans to family members.
But the crucial difference now is that they are not ‘locked in’ to physical money. They don’t have to carry or store it. They don’t have to queue at a bank to deposit or withdraw it. They don’t have to get paid in front of everyone else at work every week. And they don’t risk running out of money if they miss the bank before a weekend or holiday.
These are all examples where cashless payroll is better than cash, because it supports convenience and enables choice.
This choice is no longer a luxury or a ‘nice to have’. Most economies, including frontier, are moving steadily towards cashless as their payments framework – a process recently accelerated by legislation in Egypt.
One of the consequences, over time, is that cash will become much more limited in its acceptability and applications. This will progressively reduce, or even remove, choice for people who are still paid in cash only.
For the proposition that cashless is ‘better than cash’ to have reality for millions of low paid workers, their journeys to familiarity with living cash free need to start now.
And it all begins with how they get paid.
Discover more about The Better Than Cash Alliance here.