By Ruth Goodwin-Groen
When I started as the Founding Managing Director of the United Nations hosted Better Than Cash Alliance in October 2012 (having recently completed a mid-career PhD at Bath), the goal was clear: to create a global movement from cash to responsible digital payments to accelerate the SDGs. Nothing too big, just a global movement. The good news is that we achieved our goal and the global movement is in full swing!
The members and partners of the Alliance included an estimated 90% of global GDP in Dec 2023[1] and have made a vital contribution to the est. 1.1 billion digitally financially included since 2014. Emerging market governments (such as India and Ethiopia), global companies (such as Unilever and Inditex), international organizations (such as WFP and IRC), and apex bodies (such as the World Cocoa Foundation) are members; global & regional intergovernmental groupings (such as the G20) are partners.
All members and partners are on a journey away from cash to the digital payment solutions they decided were responsible digital payments in their contexts. This is what I learned matters:
Institutions matter to drive payment digitization, and it is internal champions for government and company visions who most effectively ensure delivery on commitments.
Every member of the Alliance made either a whole-of-government commitment or a CEO level commitment to deliver on their responsible digital payments journey. We learned that only one department or just the Central Bank committing to their journey by joining the Alliance was not enough to drive change, it had to be across the government or company. For example: the Prime Minister announced India’s membership; in Bangladesh it was the Prime Minister’s Office which announced it; in Ghana it was the Minister of Finance on behalf of the government; and Unilever CEO approved membership and its Chief Sustainability Office announced membership.
This commitment was either followed by or accelerated a national vision and plan which reflected rules or norms within the society/company about moving to a digital future. For example, Ethiopia’s Prime Minister wrote the forward for Ethiopia’s National Digital Payment Strategy in 2021 and it was clearly aligned with Digital Ethiopia and its Homegrown Economic Reform Agenda. In Bangladesh it was to accelerate its “Digital Bangladesh” vision. Ghana’s Cashlite Roadmap brought together several different agendas to create the national way forward. Gap set a Tier 1 digitization target to show its commitment to supply chain transparency. Responsible digital payments were a foundational element for all. The institutional functions to implement the national vision ranged from national biometric identity to enforcement of consumer protection regulations to sectoral wage payment norms.
In addition, every Alliance member with whom the Secretariat works in-depth has one or more senior respected champions of the national (or regional or company) vision who bring others along on the journey, effectively reinforcing the norms in the vision. In Ethiopia they include the Ministers of Finance, the Central Bank Governor and the Prime Minister. In Bangladesh they include the President of the Bangladesh Garment Manufacturers Export Association (BGMEA), the State Minister for ICT, Minister for Industries, and a leading digital thinker in the Prime Minister’s Office, now leading on Smart Bangladesh! These are just few examples to illustrate the lessons.
Innovative endogenous institutions have been most effective. The countries which now have the fastest growing adoption of digital payments are India and Brazil thanks to India’s Universal Payment Interface (UPI) and Brazil’s (PIX) . Both were innovatively designed and implemented nationally and are both delivered at zero cost to the consumer. Bangladesh’s Zero Digital Divide is taking a wholistic low-cost approach which many other LMICs are keen to learn from. India, Brazil and Bangladesh have not followed a northern blueprint or used international experts but designed everything according to their own priorities – to create a responsible digital payment architecture that works for urban and rural areas, men and women, young and old. Kenya’s M-Pesa mobile money which has become ubiquitous was also designed endogenously in this case by a private company with the approval of the government. The UN and World Bank have together collated the research to show precisely how responsible digital payments can contribute to poverty reduction SDG 1, gender equality SDG 5, and climate action SDG 13 with many examples from India, Bangladesh, Kenya, Ghana, as well as other Alliance members such as Colombia, the Dominican Republic, Rwanda, Uganda, Jordan, the Philippines and Indonesia.
Women are macro critical, as are climate and digitization, and national governments are starting to see the intersectionality of these challenges and a real opportunity to address these agendas together: All UN member states committed to SDG 5 in 2015 and seven years later, the Generation Equality Forum in 2021 brought the issue of reaching financial equality for women to the global agenda again. It is encouraging that the IMF has now applied its data and credibility to recognize that women’s economic inclusion is macro-critical. In addition, at each successive COP, the imperative to address climate change at scale is becoming more urgent. National government members of the Alliance are all working on building a digital infrastructure which is inclusive and foundational for women’s financial equality and essential for climate adaption – including payments and payouts for weather index insurance (see SDG 13) or Anticipatory Action in the face of crises. The Vulnerable 20 (now 68 countries) and the Alliance issued a joint Call to Action by the V20 and key Alliance members at COP28, recognizing this intersection and seeing the opportunity to simultaneously address these challenges.
As I am now moving on from the Alliance, my hope is that funders learn from our members that their imposing development blueprints, so-called 'best practices’ or even technology standards on other countries are vestiges of a colonial past. Instead, partnership with national governments and companies is the way forward as they create and adapt innovative endogenous institutions for responsible digitization, ensuring social inclusion and addressing climate change.
[1] Estimation includes G20 member countries as the Alliance is an G20 GPFI Implementing Partner, now including the African Union, and other Alliance members and partners.
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