At the World Economic Forum Annual Meeting in Davos, Switzerland, the Better Than Cash Alliance (BTCA) 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 precent 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 of the UN Capital Development Fund (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.
Together with its founding organizations, the Bill & Melinda Gates Foundation, Citi, Ford Foundation, Omidyar Network, UNCDF, USAID and Visa Inc., BTCA is pleased to welcome even more partners to the Alliance that are dedicated to making this transition a reality.
BTCA’s newest partner is the government of Afghanistan who will join the governments of Colombia, Kenya, Peru and the Philippines, in addition to UNDP, the World Food Programme, Mercy Corps, Care, Concern and Chemonics in a commitment to transition from cash to electronic payments.
“We are thrilled to be part of the BTCA,” said Marc Bichler, UNCDF Executive Secretary. 'This alliance was triggered by forward looking and forward thinking actors from the public and the private spheres. It uses new technology to solve old problems and it works hand in hand with the partner governments who stay in the lead. This is how you build partnerships. This is how you organize effectiveness!"
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, the Better Than Cash Alliance is determined to quickly move this transition forward making real progress in the year ahead.