Two billion people – nearly one-third of the world’s adult population – lack a bank account. For many readers of Global Daily, this statistic is likely well known. What perhaps isn’t as well known is that of those two billion people, 40 percent are young people. Nearly half are women. Half are urban. Half have jobs. And they’re all left without things that are commonplace for many of us: proof of identity, a way to save money for a rainy day, a way to get loans, a way to insure themselves or their crops. And it’s not just about having an account – it’s about using an account. Usage is a challenge in many countries, where large segments of a population may have an account but still use cash to pay for things like utility bills, school fees, and remittances.
Cash is the enemy of inclusion.
Why does all of this matter? It matters because cash is the enemy of inclusion. It matters because cash is the enemy of the poor. Think about having to weigh the demands of an hourly job with the need to stand in line to pay a bill. Think about not being able to send money back home to your family at a reasonable cost. Think about having the social benefits you just got in cash stolen as you make your way home.
And if cash is your only choice for how to pay for things or receive payments, you’re left using a medium of exchange that can’t connect you to technology in an age of technology; that isn’t digital in an age of digital; that doesn’t provide data analytics or insights in an age of smart data; that frankly and simply, doesn’t compute in an age of computing. And what about the role of cash in a future with the Internet of Things, where every device is connected? What kind of life will those who aren’t included have? We’ll have the Internet of Everything but not the Inclusion of Everyone – which is what makes me also say cash is the enemy of a smarter future.
We’ve committed to bringing 500 million people and 40 million small merchants and micro-entrepreneurs into the financial mainstream by 2020. And we’re well on our way.
The opportunity before us is clear. Technology – if used well – can help us as a global community achieve things previous generations could only dream of: reduce global poverty further, include more people financially, and create economic growth that’s more inclusive and equitable. International development organizations like the UN and the World Bank – along with countless governments and foundations around the world – as well as many of us in the private sector – are working together to seize this opportunity. At Mastercard, we’re partnering with governments to channel social benefits directly to recipients, cutting out the middle man, and providing a sense of identity, security, and empowerment, most importantly, to those most in need. The UN World Food Programme is leveraging our technology to provide aid to hundreds of thousands of Syrian refugees. We have 500+ financial inclusion programs around the world in 50+ countries. We’ve committed to bringing 500 million people and 40 million small merchants and micro-entrepreneurs into the financial mainstream by 2020. And we’re well on our way.
As more people move from cash to digital forms of payment, shoring up trust in financial systems – getting various players of an ecosystem connected in a seamless, secure way also becomes mission critical. To get these things done – to drive financial inclusion in a sustainable way – we need public-private partnerships. We need organizations advocating for change. We need companies bringing their technologies and skills to the table. And we must continue to resist the temptation to act in isolation within our own sectors or within borders and continue to build on the solidarity that’s the proven path to success.
Image: Coffee is not only the primary cash crop in Timor-Leste, it is the main income earner after oil and gas. A coffee handler with coffee beans from Cooperative Café Timor. UN Photo/Martine Perret.