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Building Digital Liquidity to Enable Payments at the Base of the Pyramid November 2018
Building Digital Liquidity to Enable Payments at the Base of the Pyramid
November 2018
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Executive SummaryMastercard aims to provide consumers with products and services that meet their needs to place them on a path to greater financial health. We have a goal to connect 500 million people and 40 million micro and small merchants previously excluded from formal financial services by 2020 and 2021, respectively. As such, we have made major investments into serving the “Base of the Pyramid” —the communities most in need of a path toward financial health. Digital payments play an important role in this effort as the ability to transact quickly, safely, and efficiently is critical for consumers to meet their everyday financial needs. We believe enabling payments at the base of the pyramid is required for promoting financial inclusion and building financial health.
Early financial inclusion efforts have resulted in the growth of account ownership for consumers, without a proportionate increase in the use of digital payments. This lag in usage limits benefits to consumers because they still need to first convert their funds to cash to make payments. Building digital liquidity, consumer access to a digital store of value maintained through widespread acceptance of digital payments, requires the concurrent growth of both access and usage. It is critical that we match demand for digital payments through product issuance with the appropriate supply of digital acceptance. By building a balanced market for digital transactions, consumers will be able to receive and spend their digital funds with ease and be incentivized to maintain their funds in digital form.
To understand how we can build digital liquidity, we highlight challenges in the consumer payments journey as our guide to identify the value propositions for digitizing payments as well as the optimal financial flows for digitization. In this report, we first identify four major challenges that both payers and payees face when dealing in cash payments: (i) cost; (ii) transparency; (iii) security; and (iv) consumer experience.
We then dive into three areas that we, along with our strategic partners, should consider when driving digital liquidity:
Three Areas of Focus for Driving Digital Liquidity1. Payment Inflows
Understand how consumers receive funds and design digital payment solutions targeting consistent and replicable inflows to overcome consumers’ challenges
2. Payment Outflows
Understand consumer purchase behavior to identify consistent and replicable outflows that, when digitized, benefits both payer and payee
3. Value Chain Payments
Understand the payment flows in value chains that underserved consumers participate in to identify opportunities for digitalization of businesses serving the base of the pyramid
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Non-traditional stakeholders
Non-traditional stakeholders are organizations that drive commerce at the base of the pyramid. These organizations may not traditionally be considered as drivers of financial inclusion. These include but are not limited to:
• Telecommunications providers
• Agribusinesses
• Consumer goods companies
• Apparel companies
• Energy providers
While traditional players in the financial inclusion ecosystem still have a role to play, those involved in commerce have a vested interest in digitalization and stand to benefit from financial inclusion.
Traditional players such as governments, non-profits, financial institutions, and payment service providers have worked diligently to advance digital payments in underserved communities. But we can further accelerate progress through strategic partnerships. There are opportunities for actors beyond the payments industry to partner and help drive financial inclusion through payment digitization. Stakeholders across different industries, from agriculture to telecommunications to consumer goods, all have important roles to play in the extension of digital payments to the base of the pyramid. These non-traditional stakeholders, who may not have previously recognized payments as an opportunity to expand into new markets or to reduce costs, have considerable incentives to adopt digital payments. It is abundantly clear—we cannot make progress toward sustainable change without collaboration with organizations that also believe in the power of financial inclusion and digitization to lift people out of poverty.
As we examine inflows, outflows, and value chains, we will identify some of the relevant stakeholders in the lives of the underserved and the corresponding value that digitization can bring to these stakeholders. As you read this paper, we invite you to think about how your business could benefit from greater digitization and how you can play a role in financial inclusion.
This paper expands on our previous work, The Next Frontier in Financial Inclusion: Moving Beyond Access to Usage, which provided perspectives on developing and deploying digital financial products that underserved communities will not just access, but also use. In this paper, we identify approaches for building the supply of and demand for digital payments by highlighting how to drive digital liquidity through strategic partnerships. This digital liquidity is the key to moving from “Access” to “Usage” and generating transformational impact.
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Introduction: Digital Liquidity and Base of the Pyramid PaymentsTechnology—and its rapid adoption—is creating unprecedented opportunities for companies to serve new markets around the world. Inclusive business models and products are providing better ways of reaching underserved communities. Digital products and services, especially those that can be accessed on mobile devices, allow these underserved consumers to take the first steps to becoming part of the formal financial system.
Efforts to foster digital payments have usually focused on nurturing either demand or supply of payment opportunities. The early emphasis on access led to growth in account ownership, but this was not followed by a proportionate increase in the use of digital payments. Recent research in Mexico revealed that numerous digitization interventions did not appropriately consider consumer usage opportunities, which led recipients to quickly convert funds to cash rather than maintain a digital store of value.1 Given this historical focus on increasing consumer access to digital payments, there is often an imbalance between issuance-driven demand and acceptance-driven supply of opportunities to maintain digital liquidity. The resulting lack of liquidity stemming from this imbalance inhibits the ability of consumers to realize the true utility of digital payments. Addressing this mismatch can result in more active and consistent product usage.
FIGURE 1
Realizing Value from Digital Liquidity
Drive Network Effects
ACCESS USAGE
Person
Merchant
Business
Government
Person
PAYMENT SYSTEM
Merchant
Business
Government
Create Digital Liquidity through
Issuance
Maintain Digital Liquidity through
Acceptance
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Mastercard, with the help of partners, can build digital liquidity to enhance the financial health of the underserved. As the ability of consumers to transact digitally grows, the value of maintaining funds in a digital form increases for all users. The growing network effect will serve as the foundation for a digital economy. Ubiquitous consumer adoption of a digital store of value will catalyze a self-sustaining mechanism that supports a digital payment ecosystem.
To build digital liquidity, we need to develop a full 360-degree view of how consumers receive and make payments, i.e. the consumer payments journey. While it is difficult to capture the full spectrum of payment experiences across sectors, geographies, and different walks of life, using this framework ensures our ideas remain grounded in a human-centered approach. In this paper, we highlight challenges in the consumer payments journey as our guide in identifying not only key financial flows for developing digital liquidity, but also opportunities for interested parties beyond the payments industry to collaborate and help spur the growth of payments.
We begin by further developing the concept of digital liquidity and why it is important. We dive into opportune inflows in the lives of the underserved, most notably payroll. We then look at valuable outflows and use the case of merchant payments to highlight the value digitization provides. Lastly, we combine these concepts to look at a full end-to-end industry value chain to introduce opportunities for digitalization, a concept we will explore further. As the global agricultural sector is comprised of 500 million smallholder families representing 2.5 billion individuals, we leverage it as a representative example to discuss the complexity and aggregation of the many flows in a value chain (see Figure 2 below).
Merchants
Here, we define merchants as the small and microbusinesses (SMBs) serving consumers at the Base of the Pyramid. These SMBs play a critical role by providing the goods and services to meet everyday needs and serve as the main economic touchpoints in the lives of the underserved.
Digitization vs Digitalization
Digitization refers to the process of changing from analog to digital form, for example transforming paper currency into an electronic or digital store of value, providing greater accessibility and usability than previously existed in the physical form.
Digitalization, on the other hand, refers to the use of digital technologies to change a business model and transform business processes, providing new revenue and value-producing opportunities.
FIGURE 2
Theory of Change: Access + Usage = Impact
ACCESS + =
Financial Health: Opportunities for individuals to improve their livelihoods through access and usage of relevant financial services.
IMPACT
Suitable products and services are accessible for consumer use
KNOWLEDGE TRUST
• Knowledge of product and how to use
• Aware and able to consider product features
• Understand the value of digital financial services
• Positive outcomes, stemming from consistent & active product use, maximizing the value of digital financial services
• Engagement stemming from proper and consistent product functioning
USAGE
Products are actively & consistently used because they meet customer needs & supported by the ecosystem
Resilience from shocks and opportunities to pursue aspirations
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Access: Issuance has driven account ownershipAccount ownership is increasing globally—the World Bank’s Global Findex survey found that 515 million adults worldwide opened an account (either at a financial institution or through a mobile money provider) between 2014 and 2017.2
In developing countries, account access increased from 54 percent in 2014 to 63 percent in 2017.3 Mobile money accounts have played a pivotal role in driving access, and this trend will likely continue for years to come. In some of these countries, mobile network operators (MNOs) continue to dominate as the main financial services provider for underserved communities despite the entrance of traditional financial institutions, such as banks, into these hard-to-reach segments. This is largely due to the convenience that MNOs can provide consumers, not just in the ability to transact easily and efficiently on a mobile device, but also through their network of agents providing cash-in and cash-out services. In certain African markets, registered agents of MNOs outnumber bank branches by more than a factor of 10.4
account access in developing countries in 2017, up from 54 percent in 2014.
63%
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“Today, MasterCard is proud to announce our commitment to the World Bank Group’s efforts toward universal financial access. Our target is to reach 500 million people currently considered to be excluded from the financial mainstream. In making this commitment, we recognize that reaching full financial inclusion by 2020 requires the active engagement and commitment of the private sector, working in partnership with governments and international development organizations. Together, we can be agents of transformative change who create more inclusive economies and more empowered populations.”
Ajay Banga, CEO & President of MasterCard7
Efforts to increase financial access have accelerated since the World Bank’s 2015 announcement of its goal to achieve Universal Financial Access in 2020.5 Institutions and partners in both the public and private sectors have issued commitments toward this goal and pledged to achieve access targets.
However, account ownership is only a proxy for inclusion. True inclusion should be measured by an individual’s ability to readily transact with digital funds. Account ownership and access to digital funds are not always the same. Issuance initiatives may succeed in driving consumers to open accounts, but there is no guarantee that they will actively store digital funds in these accounts. For example, the Indian government sponsored the Pradhan Mantri Jan Dhan Yojana initiative in 2014 to encourage every household to open a bank account. It was originally deemed a success as it led to the creation of 125 million new accounts. However, subsequent analysis found that 72 percent of new accounts had zero balances.6 Although these consumers had access to an account, their zero balance and lack of account activity shows that consumers derived little value through a digital store of value. With few usage opportunities, consumers were not incentivized to maintain their funds in digital form. Unfortunately, this situation is not unique; the lack of financial product and service usage remains a barrier to achieving meaningful progress.
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Usage: Account dormancy remains an issueWhile access represents the first step towards financial inclusion, the use of financial services is the main driver of financial health and inclusive growth.
Account dormancy, defined as an account that has had no deposits or withdrawals in the past 12 months, has long been identified as a hurdle to financial inclusion. According to the 2017 Global Findex data, about one-fourth of all financial institution accounts in developing countries are dormant.8 While some accounts may be serving as a secure shelter for emergency funds, which could legitimize their dormant status, this is unlikely to explain the majority of dormant accounts.
Although there may have been major gains in overall account ownership, the progress made in the number of active accounts has lagged. As previously mentioned, while account access in developing countries increased from 54 percent in 2014 to 63 percent in 2017, this gain was matched by an increase in account dormancy. Over this same time period, the percentage of the adult population in developing countries who made no deposit or withdrawal from an account in the past year increased from roughly 13 percent to 16 percent.9
In developing countries, this lag in usage is found across all financial products and services, and payment products are no different. In 2014, Mastercard Advisors published the paper A Progressive Approach to Financial Inclusion comparing the adoption of payment products (percentage of adults with a payment product)
FIGURE 3
Access vs Usage (Inflows)
of financial institution account owners in developing countries had no deposits or withdrawals in the past 12 months
of financial institution account owners in high-income countries had no deposits or withdrawals in the past 12 months
25%
4%
Adu
lts
Rece
ivin
g In
flow
s N
on-C
ash
(%)
Adults with a Payments Product (%)
100
75
50
25
00 25 50 75 100
UK
SpainKenya
PolandSouth Africa
Saudi Arabia
ChinaBrazil
Russia
IndiaUganda
Nigeria
Phillipines
Indonesia
BangladeshPakistanEgypt
Colombia
Tanzania
Mexico
Peru
Italy
Malaysia
UAE US
GermanySingapore
Belgium
Japan
Sweden
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to their usage (percentage of consumers’ transactions that are non-cash).10 While the payment landscape has undoubtedly changed in recent years (quite dramatically in the case of certain countries such as India), the data nevertheless remains relevant as it reveals important trends. Specifically, digital payments have gained greater traction with inflows, indicating that consumers are increasingly using payment products to receive funds (Figure 3). While the disparity between adoption and usage varies across countries, digital inflows are clearly becoming more integrated into the daily lives of consumers. In contrast, the digitization of outflows has been less successful. Even countries with robust financial systems like the UK, Sweden, and Germany still have gaps between adoption and usage. However, developing countries are much further behind, with many experiencing little or no use of digital payment products for purchases (Figure 4). The gap in the use of digital payments between inflows and outflows implies that consumers receiving digital funds are converting them to cash rather than maintaining a digital store of value. The lack of acceptance opportunities, especially among merchants that serve consumers at the base of the pyramid, suppresses the growth of digital liquidity. This, in turn, inhibits further adoption of digital payments, thereby perpetuating a vicious cycle.
Despite these challenges, the potential for digital payments is slowly being realized. Trends suggest that digital payment transactions are on the rise. According to the 2017 Global Findex data, 44 percent of account owners in developing countries have made or received at least one digital payment in the past year—a 12 percentage point increase since 2014. Given the significant value that digital payments create for consumers, there is a tremendous opportunity to advance the financial inclusion journey. In particular, non-traditional partners who have already established relationships with underserved consumers will play a pivotal role in broadening digital payment opportunities, creating digital touchpoints in every sector that affects consumer lives.
FIGURE 4
Access vs Usage (Outflows)
Adults with a Payments Product (%)
Egypt
Con
sum
ers
Out
flow
Tra
nsac
tion
s th
at a
re N
on-C
ash
(%) 100
75
50
25
00 25 50 75 100
UK
Spain
KenyaPoland
South AfricaSaudi
Arabia
ChinaBrazil
RussiaIndia
Uganda
Nigeria
Phillipines
IndonesiaPakistan
BangladeshColombia
Tanzania
MexicoPeru Italy
Malaysia
UAE
US
Singapore
Belgium
Germany
Japan
Sweden
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Impact: how do we achieve it?
The interdependency between access and usageAccess and usage are both important in the financial inclusion journey—they are interdependent elements that must be nurtured together. For example, increasing access to digital payments will create a greater appetite for usage opportunities. In turn, expanding digital payment usage opportunities will enhance the utility of digital funds, thereby driving consumer demand for increased issuance. While it may be intuitive to think of access as a prerequisite to usage, in many ways, they are co-dependent. Without access, there would of course be no products or services to use. However, without usage opportunities, access has limited benefits to consumers. For example, a study conducted in Chile, Malawi, and Uganda provided participants with free access to a basic savings account with a partnering bank. While many individuals took the opportunity to open an account, account usage was low. The study found that access without corresponding usage had no significant impact on the household’s savings or wellbeing.11
The need for digital liquidityThe concurrent growth of access and usage creates digital liquidity. Both must be considered when implementing solutions for emerging consumers. Consumer demand for digital payments enabled by issuance must be appropriately matched with the supply of digital payment opportunities. The optimal path to digital liquidity requires balancing this supply and demand.
In crafting interventions, we must assess the current market situation to understand how to improve the alignment between issuance and acceptance opportunities. Access to digital payments should be supported by the expansion of acceptance opportunities. In contrast, an abundance of usage opportunities should spur the growth of consumer issuance to increase access to digital payments. Interventions that are unbalanced in their effort to develop payment systems will lead to a lopsided and underdeveloped market. Currently, with limited usage opportunities, underserved consumers are not fully realizing the benefits of the products and services to which they have access, which severely constrains the impact of access-driven initiatives. As a result, consumers have no choice but to convert their funds to cash to purchase goods and services.
Where to focus? Targeting key flows
As we evaluate the need to drive digital liquidity in a payment system, the logical next question becomes: where do we focus our energies and efforts? Understanding the current state of the consumer payments journey is particularly useful for helping to answer that question by enabling us to identify challenges consumers face along that journey. Insights on consumer challenges can uncover opportunities and approaches to help build a more sustainable payment system.
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Cash payments introduce various challenges for consumers as they transact to meet their daily needs. These challenges represent opportunities for various actors to create digital solutions that provide value to both the payer and payee. While consumer payment journeys will vary drastically based on segment, geography, and use case—there are four major categories of challenges commonly experienced by underserved consumers: (i) cost; (ii) transparency; (iii) security; and (iv) consumer experience. The table below provides an overview:
Key Challenges in Using Cash
Description
Cost Time requirement: Time spent traveling long distances or waiting in lines to receive funds or pay a bill translates into lost productivity.
Transportation costs: The necessity of physical proximity to transact with cash can require further expenses (e.g., petrol, bus fare).
Handling costs: Additional resources (e.g., administrators and security) are needed to account for and maintain cash bundles.
Transparency Traceability: The inability to track funds calls into question the validity of transactions and creates opportunities for corruption and fraud.
Financial reconciliation: The ability to manage finances in a low-value, high-frequency transaction environment can be quite difficult when dealing in cash.
Security Storage risk: Cash is more susceptible to theft or tampering than other non-physical stores of value.
Personal safety: Cash balances, for both personal and business uses, also puts the personal safety of individuals at risk by making handlers more susceptible to violent robbery.
Financial control: A reliance on cash puts individuals, particularly women, disadvantaged in the amount of control one has over their finances.
Consumer Experience
Irregularity of payments: External factors (e.g., weather) can lead to delays and an irregular payment schedule, especially for cash wages.
Inconvenience: The accumulation of small frictions can lead to an overall sense of helplessness and inconvenience.
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The consumer payments journey highlights not only how digital payments provide value, but also how consumers receive and spend their money. To foster digital liquidity, we must target key financial flows, both inflows and outflows, that exist in consumers’ daily lives. For an engagement to be impactful, these flows need to be consistent, in that the consumer regularly makes a specific transaction to meet a need. These flows also need to be replicable, suggesting that flows from disparate, yet similar, sources can share attributes that help achieve scale. We acknowledge that financial inflows and outflows do not exist in a vacuum. Value chains embody an inter-related web of these inflows and outflows. Certainly, no one actor or solution alone will succeed in digitizing an entire value chain. Nevertheless, it is through a targeted approach leveraging the strength of partners that we can catalyze network effects and drive digital liquidity at scale. The following table summarizes digitization approaches across inflows, outflows and value chains.
Key Approaches for Driving Digital Liquidity
Approach Objective Value Proposition Deployment Tactics Example Use Cases
Target Payment Inflows
Identify and digitize key payment inflows to: • Drive consumer preference
for receiving digital wages• Incentivize payer
adoption of digital disbursement mechanisms
Drive Consumer Preference • Reduced time
to receive wages• Greater security• Improved consumer
experience that drives usage
• Potential for value-added services
Incentivize Payer Adoption• Convenience and cost
savings from easier disbursement
New Product Solutions to:• Leverage consumer-centric
insights from the consumer payments journey
• Overcome last-mile consumer challenges
• Digitizing private payroll• Contract manufacturing,
e.g. apparel • Digitizing government payroll
and subsidy payments
Target Payments Outflows
Identify and digitize key payment outflows to:• Drive consumer
preference for electronic purchasing solutions
• Incentivize merchant adoption of digital acceptance solutions
• Drive digital liquidity• Catalyze network effects
Drive Consumer Preference• Greater financial
control over spending• Ability to obtain financing
that addresses irregularity of income sources
Incentivize Merchant Acceptance• Ability to reconcile finances• New business models
to drive expansion opportunities
New Business Models to:• Consider issuance and
acceptance simultaneously• Enable interoperability
across payment options
• Digitizing merchant payments
• Digitizing education payments
• Digitizing payments to energy providers
Target Value Chain Payments
Digitize key payment flows within specific value chains to:• Catalyze digitalization
Drive Digital Liquidity• Greater access
to consumer data for service providers
• More inclusive growth
Catalyze Digitalization• Create benefit across all
parts of the value chain
New Market Development Initiatives to: • Incorporate all of the
stakeholders within a value chain that touch the end consumer
• Forge appropriate partnerships that overcome existing consumer barriers to greater usage
• Digitalization of the supply chains for agricultural products, energy access, healthcare products, or education spending
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Digitizing payment inflowsUnderserved consumers tend to receive income through various sources, from remittances and government benefits to wages earned from an employer or entrepreneurial activities.
While these disparate income sources create multiple opportunities for digitization, the infrequency and unpredictability of some sources make the adoption of digital solutions particularly difficult. Wages, such as payroll, on the other hand, represents a unique opportunity to capture inflows that are both consistent and scalable. Roughly 48 percent of the employed workforce in Low- and Middle-Income Countries are represented by wage and salaried workers, and this trend is growing.12 Beyond addressing many of the challenges associated with cash-based transactions presented earlier, digitizing wages serves to empower consumers with a digital store of value that can be used to fulfill their needs.
Drive Consumer Preference for Receiving Digital WagesWage digitization can provide immediate relief for employees from some of the challenges discussed earlier. The illustrative consumer journey (depicted in Figure 5) highlights a few of these issues. Employees receiving cash wages lack the ability to trace their funds. The transfer of cash is always susceptible to human error and employers may not be willing to adjust any discrepancies that are not in their favor. From a security perspective, carrying and storing large quantities of cash makes individuals vulnerable to theft, which not only hinders their ability to save, but can also make them the target of personal attacks. Digitized wages provide consumers with a safe way to store their funds and increases the likelihood that they retain access to those funds. Digitized wages can also be paid out more quickly and frequently than cash, giving consumers easier access to their wages. As the Consultative Group to Assist the Poor’s Financial Diaries research shows, this is especially important for families whose income can be quite volatile over time. Financial control and privacy are crucial advantages of electronic wages, specifically for women.
The benefits for non-traditional stakeholders
Private-sector companies can play a role in the digitization of payments to individuals, creating opportunities to reduce inefficiencies and waste while also bringing tremendous benefit to their employees.
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Non-traditional stakeholders in action
Business for Social Responsibility partnered with the Bill & Melinda Gates Foundation to digitize worker salaries in 21 factories.
Many of these benefits have been realized by garment factory workers in Bangladesh. Bangladesh’s garment industry represents 13 percent of its GDP and is comprised of 4.4 million workers, 80 percent of whom are women.13 While Bangladesh has made great strides towards digitization using mobile money platforms like bKash, 90 percent of salaries paid by businesses are still distributed in cash. Appreciating the opportunity, Business for Social Responsibility partnered with the Bill & Melinda Gates Foundation to digitize worker salaries in 21 factories.14 A subsequent survey found that the proportion of women who could not save because a family member controlled her wages decreased by 69 percent.15 Overall, employees were generally satisfied with the shift to electronic wages due to the increased safety and convenience.16
The Case for Employers: Incentivize payer adoption of digital disbursement mechanisms
While there are many incentives for consumers to embrace digital wages, the choice to move towards digitized payroll must be initiated by the employer. As the payer, employers must overcome the initial barriers of digitization such as technology costs to support electronic payments.
However, there is a strong economic argument for employers to digitize their payroll. Paying wages in cash is a costly operation. There are transportation costs to bring cash onsite, in addition to storage and security costs to safeguard the funds. Cash shipments are also susceptible to weather delays, which could postpone salary disbursements and lead to unhappy employees and strikes. On payday, the cash then needs to be counted, recorded, and distributed to employees. In addition to the administrative burden, employers also lose the valuable time that employees spend waiting in line to receive their wages. This time directly translates into lost production, a burden on employers and employees alike. To ensure this process can be completed in an orderly fashion, employers often find they need to hire guards to maintain security.
FIGURE 5
Illustrative Challenges in Employer-to-Employee Cash Transactions
Consumer ExperienceEmployer has a standing bimonthly shipment of
cash, which is susceptible to weather delays.
CostEmployer has to hire
security guards to protect the cash while it’s
counted and distributed. CONSUMERTransparencyEmployees have
no recourse if paid incorrectly.
TransparencyEmployer has difficulty
keeping clear records and may find more cash
distributed than warranted.
SecurityEmployees, especially
women, may be forced to hand their wages
over to the male head of the household.
CostEmployer loses worker
productivity as they wait in line for their wages.
AWARENESS CONSIDERATION TRANSACTION POST-TRANSACTION
EMPLOYER
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Non-traditional stakeholders in action
Recognizing the business opportunity, the Tea Company, McLeod Russel piloted a program to digitize its worker payroll. The initial findings estimate that if the program is disseminated across all six estates in Uganda, the operating savings would be approximately 6.5 percent of employee salary expenditures.20
These are real opportunities for employers to cut inefficiencies and waste through digitized payroll. A survey by Better than Cash Alliance of garment factory workers was able to quantify many of these savings. For example, employers were able to regain 18 minutes of producer time per month per employee, which in a factory of 2,500 employees, translated to 750 hours of profit as a result of efficiency gains.17 Furthermore, factories who implemented digital payments saw a 53 percent reduction in time spent on administration effort.18 These savings are crucial in helping employers overcome the initial economic barrier and recoup any upfront or recurring costs associated with a digital payment solution. A 2015 study conducted in Afghanistan found that an employer was able to recover the fixed costs of electronic payments after only six months.19
The digitization of payroll represents a tremendous business opportunity for any organization paying regular salaries to their employees. Large organizations, including governments, have the most significant potential savings. Private sector actors who have not traditionally had the opportunity to advance financial inclusion can now play a crucial role in extending digital payments to the base of the pyramid. By working with knowledgeable and experienced partners, organizations can gain significant benefits while also helping to build financial health.
Successful product and services must employ a human-centered approach from design to deployment. In The Next Frontier in Financial Inclusion: Moving Beyond Access to Usage, we outline six essential deployment considerations, one of which is merchant acceptance. Aligning acceptance initiatives to consumer issuance is critical to driving meaningful usage of digital payment products, thereby building digital liquidity. We now shift our attention to key outflows where consumers are now able to exert their digital spending power.
CASE STUDY
Illustrative Product Innovation for Payroll: Mastercard and the Central Bank of Egypt Mastercard’s prepaid program in Egypt brings to life many of the benefits of digitization. In partnership with Egypt’s Ministry of Finance and the Central Bank of Egypt, Mastercard successfully launched a prepaid program to digitize the government payroll in 2010. Previously, government salaries were distributed through cash payments, adhering closely to the cash-based culture in Egypt. Employees were often not paid on time and usually had to wait in line for hours before receiving their payment. For the government, the disbursement of salaries to six million employees was a costly operation. Furthermore, maintaining transparent records was difficult.21
Mastercard’s Prepaid Payroll Card program addressed these challenges. All government employees were issued cards and their wages were deposited on the cards each month on time, creating to a dependable source of income. In fact, government employees participating in the program had uninterrupted access to their salaries during the Arab Spring. Now, 108 billion Egyptian Pounds are loaded annually onto prepaid cards, reducing the burden of paperwork as well as the operational costs around the handling of cash.22
Reduction in the time spent on administration effort
53%
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Digitizing payment outflowsDigitizing inflows for the underserved is an important step as it empowers consumers with the digital funds to initiate payments. However, without the ability to use their digital currency, consumers have no choice but to convert these funds to cash. Providing digital use and spending opportunities is necessary to maintain these digital stores of value. Capitalizing on these opportunities is not just good for society, but is also good for business, as it can unlock the spending potential of the financially underserved, who collectively spend more than five trillion dollars per year.23 The bulk of this spending is on consumer goods (food, beverages, clothing, and household goods), often through transactions with small merchants or retailers (see Figure 7). In many developing regions, such as East Africa, mobile money transactions have served to displace cash for person-to-person payments, yet merchant payments lag far behind. Globally, 37 percent of the US$18.8 trillion market for person-to-merchant (P2M) payments to micro, small, and medium retailers are made electronically. By comparison, only 16 percent of these payments in sub-Saharan African and 14 percent of these payments in South Asia are conducted electronically (see Figure 6).24 There is a significant potential for growth.
Consumers who rely on cash to make payments experience major challenges that could be alleviated by digitizing their payment experience. Understanding the challenges consumers experience as they make payments can help payment service providers improve their lives and create opportunities for businesses to
FIGURE 7
Underserved Consumption Patterns
47%Food & Beverages
4%Education
10%Other
6%Transportation
6%Heath & Hygiene
7%Clothing & Footwear
11%Utilities & Telecommunications
10%Housing
Share of Consumption
by Industryfor Underserved
Populations
High-Income OECD
Europe & Central Asia
East Asia & Pacific
Latin America & Caribbean
Middle East & North Africa
Sub-Saharan Africa
South Asia
67%
37%
28%
28%
23%
16%
14%
FIGURE 6
Percentage of payments to micro, small, and medium retailers made electronically
Source: Cash vs. Electronic Payments in Small Retailing – Estimating the Global Size. World Bank Group.
Source: World Bank Global Consumption Database.
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FIGURE 8
Illustrative Challenges in Consumer-to-Merchant Cash Transactions
serve these consumers. High-volume, small-value merchant payments are vitally important to the well-being of underserved consumers and their livelihoods, as well as the general functioning of local economies. Small merchants and retailers sit at the crossroads of the cash economy, presenting a huge opportunity to leverage and expand the use of digital payments for underserved consumers.
Drive consumer preference for digital purchasing solutions Digitizing merchant payments can help alleviate many challenges for consumers (see Figure 8). Security is one major benefit. A digital account not only provides a safe place to store funds, but it also removes the danger of carrying cash. Marketplaces are often a target for thieves due to the large amounts of physical cash on hand. As a result, individuals may choose to only carry small amounts of cash, limiting their spending ability. In addition, unlike cash payments, accessing electronic wages requires a level of identity validation, increasing financial control. Payment solutions that use digital identity and biometric information further increase system integrity by adding an additional authentication layer. The speed and convenience of digital payments reduce friction around the commerce experience. For example, without the need to count bills, consumers and merchants can complete their transactions more quickly and cost effectively, thereby reducing the cost of transacting.
Loyalty programs attached to electronic payments can provide consumers with additional value. For example, Safaricom launched “Maisha Ni M-PESA Tu”, a rewards program where consumers can earn loyalty points for using Lipa Na M-PESA, a service that allows consumers to use mobile money for merchant payments. Earned points can be redeemed for data, minutes, and SMS.25
SecurityConsumer unaware
of missing cash.
SecurityConsumer limits amount
of cash carried due to security concerns, limiting
transaction values.MERCHANT
Consumer ExperienceMerchant must maintain
enough cash reserves to provide change back
to consumers.
TransparencyConsumer realizes that
they accidentally overpaid the merchant.
TransparencyMerchant must reconcile their finances from the
entire day’s transactions.
Consumer ExperienceConsumer must wait in
long line to make payment and receive change.
CONSUMER
AWARENESS CONSIDERATION TRANSACTION POST-TRANSACTION
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The Case for Merchants: Incentivize merchant adoption of digital acceptance solutionsIn a previous Mastercard paper, “Building Electronic Payment Acceptance at the Base of the Pyramid to Advance Financial Inclusion”, four critical barriers to the expansion of electronic payments were laid out:
• Economic factors such as the cost of acceptance and value provided to merchants;
• Risk such as the financial and process risks associated with the onboarding of merchants;
• Distribution challenges of driving acceptance with base of the pyramid populations;
• Friction, stemming from the merchant payment acceptance experience and the infrastructure available to support payments.
While these are real obstacles that can hinder the growth of merchant acceptance, especially in many rural areas, there are still strong incentives for merchants to adopt digital acceptance solutions. Similar to challenges experienced by employers, cash can create additional administrative and security concerns for merchants. For example, maintaining a sufficient supply of small bills to provide change is often an inconvenience. Furthermore, managing finances can be difficult, especially for merchants who deal in high-volume, low-value transactions. While inconveniences like these may seem trivial, they are important challenges to address for merchants. Merchants who have adopted electronic payment methods point to the increased transaction security, speed, and the reduced burden of providing change as a few of the most salient benefits.26
In addition to overcoming challenges with cash payments, electronic payment solutions can provide value-added services which enhance the merchant value proposition. For instance, merchants can use electronic payments to provide additional services, such as agent banking, creating a new revenue stream and potentially unlocking new customer segments. Additionally, payment data can be used to assess a merchant’s credit-worthiness and facilitate lending. For example, the Jaza Duka partnership between Mastercard and Unilever provides short-term loans to small and medium enterprises based on their digital purchasing history.27 This allows merchants to maintain their stock of Unilever goods. As a result, participating merchants found that their sales grew on average by 20 percent in the first six months after gaining access to the loans.28
growth of merchant sales after gaining access to short-term loans
20%
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At Mastercard, we seek to develop a deep understanding of the frictions that exist in the merchant payment ecosystem to better target interventions. The right acceptance solutions and business models can provide a win-win for merchants and consumers. Merchant acceptance will incentivize consumers to adopt digital payment methods and derive benefits from a digital store of value.
However, this does not come without an obvious need for consumer behavior change. For this reason, ongoing engagement and education campaigns providing guidance on how to make the most of digital financial service offerings are a critical component for unlocking consumer benefits.
While merchant payments are critical, all organizations providing products and services to underserved consumers can help create the necessary digital liquidity to fuel a payment system. Non-traditional actors such as consumer package goods companies and microfinance institutions can build additional payment opportunities. Through their existing relationships with consumers and merchants, these stakeholders are in an optimal position to increase adoption of digital payments. Many utility companies have already taken advantage of this opportunity by providing digital bill payment services. Furthermore, consumer goods companies like Unilever have created innovative business models to support SMBs, one of which targets the digitalization of their entire value chain. With each small step, we begin to achieve real and measurable impact in the lives of the underserved.
Non-traditional stakeholders in action
Large amounts of cash made truck drivers for the Nigerian Bottling Company, a local distributor of Coca-Cola products in Nigeria, the target for robberies, which occurred as frequently as once a month. The digitization of payments from supplier to dealer reduced the risk to drivers and increased transaction security.29
CASE STUDY
Illustrative Product Innovation for Merchant Payments: Mastercard QRMastercard has made a public commitment to connect 40 million micro and small merchants around the world to its payment network, and its Mastercard Quick Response (QR) product is helping make this goal a reality. Mastercard QR is a payment solution powered by smartphone technology that is efficient and convenient for both consumers and merchants in underserved markets. The solution enables consumers to easily purchase goods by scanning the merchant’s QR code and receive an instant confirmation of the transaction on their phone. For merchants, Mastercard QR unlocks another revenue stream and helps avoid the high cost of installing a point-of-sale terminal, which can be a significant barrier to acceptance. Among the 30 markets using Mastercard QR, Pakistan had the highest number of transactions on the platform in 2017. The high rate of consumer adoption is attributed in part to successful campaigns with some of the country’s most prominent brands.30 For example, Mastercard collaborated with businesses to offer product discounts to initially drive consumer adoption.
Mastercard QR has been adopted in several other countries including Kenya, Nigeria, and India. It has been responsible for increasing merchant payment acceptance and overcoming key barriers, especially those related to cost. As smart phone penetration continues to increase among consumers, this product will help to drive greater access and usage of digital payments.
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Digitalizing value chains A smallholder farmer may receive money from an agribusiness for her weekly harvest and may spend that money on schooling for her child every month. However, these individual transactions are part of much larger value chains that impact her life. By understanding broader value chains—in this case of agriculture and education—we can unlock both transformative financial inclusion and business opportunity for actors across the value chains through digitalization.
Digitalization refers to the use of digital technologies to change a business model and transform business processes. If we can digitize specific payment flows in one part of a value chain, there is benefit created in other parts of that value chain. The more parts of the value chain that have payment flows digitized, the greater digital liquidity there is throughout the system and the greater access to information for all stakeholders. This broad digitalization of business processes throughout a value chain can create new value-producing opportunities and potential revenue streams. To illustrate this concept, we will explore how digitalization is possible in the agriculture value chain.
The need for financial inclusion in the agriculture value chainAgricultural activities are the top source of income for underserved consumers around the world.31 On a macro-level, an estimated 500 million smallholder families across the world represent 2.5 billion individuals.32 In Uganda, for example, agriculture employs 80 percent of the population and comprises 23 percent of GDP; however, 70 percent of those farmers live on less than US$2.50 per day and only 10 percent have a bank account.33 Eighty percent of farmers in Africa are classified as smallholder farmers having less than two acres of farming land.34
Consumers working in the agriculture sector are particularly prone to the challenges of working within the confines of cash-based economies. For example, 93 percent of agricultural payments in Kenya are made in cash (versus 71 percent for all transaction flows).35 In a national survey of Ugandan smallholder households, 100 percent of respondents reported being paid in cash when they sell their crops, while 95 percent reported paying suppliers for key agricultural inputs in cash.36
The benefits for non-traditional stakeholders
Private-sector companies can play a role in the digitization of value chains. One example is in agriculture, where digitalization across stakeholders provides security, reliability, and transparency for smallholder families who rely heavily on farming activities.
Other sectors include: education, healthcare, energy, and consumer goods.
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Cash-based Challenges for Smallholder FarmersThe lack of access to electronic payments puts many farming households at risk. Due to harvest variability, agricultural payments are concentrated during specific seasons throughout a given year. The security risks inherent in holding large amounts of cash during these times and the transportation costs become major concerns for smallholder families. Furthermore, when harvest time arrives, a lack of price transparency often leaves farmers vulnerable to being taken advantage of by middlemen. Without up-to-date information on prevailing market rates for their crops, farmers have no basis from which to negotiate how much should be transacted, leaving them susceptible to passing up potential income. Below is a simplified representation of challenges found in a smallholder farmer’s consumer payments journey, highlighting a few of the challenges that a farmer faces when receiving cash and making purchases.
While the simplified consumer payments journey for agriculture provides just two representative flows (see Figure 9), the corresponding consumer payments journey across the entire value chain in the agricultural sector can take many forms. In vertically integrated value chains, farmers and agricultural workers exist as part of a global agribusiness network, sometimes receiving cash payroll or other income directly from an employer. In informal value chains, farmers may transact directly with a broker or middleman who then proceeds to bring their product to an open market or small merchant.
FIGURE 9
Illustrative Challenges of Cash Transactions in Agriculture Value Chains
TransparencyFor one tea company,
cash wages are airdropped by helicopter every two weeks, and weather can
often delay payment.
CostFarmers that work
in a cash economy may have to travel long distances to deliver agricultural outputs
and receive payment.FARMERS
HOUSEHOLD
Consumer ExperienceFarmers may lack the
requisite financial literacy to reconcile
the household budget.
SecurityWomen in agricultural
economies can sometimes lack control over their finances; adding cash
wages to this only exacerbates the threat.
Consumer ExperienceFarmers need to be sure
that they can achieve a healthy ROI on their investments in inputs.
Consumer ExperienceThe irregularity of
payments for agricultural outputs can sometimes
make it difficult or costly to gain access
to appropriate inputs.
TransparencyFarmers may lack
knowledge of the most effective farming
techniques and the inputs required to maximize yield.
CostFarmers may require
financing which can be expensive or unavailable.
AGRIBUSINESS
INFLOWS
OUTFLOWS
INPUT PROVIDER
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Digitalization of payments driving impact across value chainsThe agricultural value chain is a complex interconnected web of transactions that impacts most consumers at the base of the pyramid (see Figure 10). Each of the nodes presented in the diagram represents an opportunity for the digitization of a payment flow. Furthermore, the value generated from specific interventions has a lasting impact that is felt further up and down the value chain.
For instance, an agribusiness that pays farmers electronically creates benefit not only for itself and its farmers (as discussed in the inflows section above)— but also for the retailers it supplies and the consumers that ultimately purchase the products. Digitizing the payroll transaction between the agribusiness and the farmer creates a “data footprint” that allows greater supply chain visibility. In large vertically integrated agribusinesses, this allows for better business decision making across virtually the entire value chain due to improved analytics and insights driven by real-time data enabled by the digital transactions. Moreover, a digital farmer payroll solution could be bundled with other digital solutions (e.g., digital identity, track and trace, etc) to enable buyers (either middle-men, retailers, or end-consumers) to have a better understanding of a product’s provenance, quality, and procurement. The data created along this digitized value chain becomes more valuable to all value chain participants (e.g., buyers and sellers), as well as organizations providing goods and services to agribusinesses.
FIGURE 10
Illustrative Agriculture Value Chain
Non-traditional stakeholders in action
Mastercard Farmers Network makes transacting much safer and simpler for all stakeholders in the agricultural supply chain—the farmer, the buyer and the agent.
Farmer
Cooperative/Farmers Org
Broker/Middleman
Agribusiness
Government
Input Provider
Open Market
Informal Value Chain
Vertically Integrated Value Chain
Cooperative-Based Value Chain
In-country processor
Exporter Importer Wholesale/Packaging
Retailer
Consumer
Retailer
Retailer
Flow of Money/Payments
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“The collaboration between the Lab team and farmers in the market helped to deliver a solution that can be implemented and make an impact without any major changes to the day-to-day.”38
Daniel Monehin, Head of financial inclusion for International Markets, Mastercard
The value of digitalization of the value chain is particularly large for the underserved smallholder farmer. She can now benefit from not just digital payroll payments, but also more targeted subsidies enabled by a government’s better understanding of payment flows; better opportunities to qualify for loans to expand farming capacity enabled through credit scoring using digital transaction history; greater visibility into market prices for inputs enabled by platforms linked to the payroll product—among other possible benefits.
Bringing the cash-based agricultural sector into the digital world can have a profound impact in addressing global poverty and creating shared prosperity. The World Bank has calculated that growth in the agricultural sector is two to four times more effective at reducing poverty than growth in other sectors.37
Digitalization of agriculture value chains can amplify growth in the sector and enhance security, reliability, and transparency for smallholder families who rely heavily on farming activities.
CASE STUDY
Illustrative Product Innovation for Agriculture: Mastercard Farmers Network Mastercard is already bringing new opportunities to the agricultural sector. For example, the Mastercard Lab for Financial Inclusion in Nairobi has developed Mastercard Farmers Network (MFN), a digital platform that connects smallholder farmers, agents, buyers and banks in East Africa.
MFN enables farmers to buy, sell and receive payments for agricultural goods via their phones. The platform brings the benefits and security of mobile commerce and payments to farmers in Kenya, Uganda and Tanzania.
MFN makes transacting safer and simpler for all stakeholders in the agricultural supply chain—the farmer, the buyer and the agent. Farmers using MFN can sell produce and receive payments via their feature phones, without having to walk for hours to a market. The platform also removes the need to hold large cash balances, addressing a major security risk for farmers. The platform enables farmers to capture a greater percentage of the wholesale value of their goods by providing price transparency, more direct access to buyers and empowerment of farmer-friendly agents.
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ConclusionBy targeting key inflows, outflows, and value chains, we can identify tangible opportunities to capture consistent and replicable financial flows, in turn generating usage and impact. These approaches also lend themselves to creating the necessary volumes and revenue to drive commercial viability and scalability. Thus, not only is this approach beneficial for the underserved communities and families we serve, but it is also good for business across the payments value chain.
Enabling digital liquidity is key to catalyzing the journey to financial health. By building a market for digital transactions, consumers will be able to receive and spend their digital funds with ease and thus will be incentivized to maintain their funds in digital form. It is critical that we match demand for digital payments through consumer issuance with an appropriate supply of digital acceptance. Balanced interventions through both access and usage initiatives will create the self-sustaining flow of digital currency necessary to fuel the development of a robust digital economy.
Building a digital payment system will require an ecosystem of partners. Public-private partnerships alone are not sufficient to drive the digitization of financial flows required to support financial inclusion. To build inclusion, we need private partnerships to help build the necessary liquidity. All stakeholders participating in flows that serve the base of the pyramid can help address inflow and outflow opportunities, thereby furthering the digitization of value chains. Non-traditional partners who participate in this effort will gain corresponding benefits to their business while also helping to create a robust payment system. Financial inclusion of underserved consumers can only be achieved when all players, public and private sector alike, are aligned. The resulting synergy can create an enabling ecosystem for a digital economy to flourish. In our subsequent white paper focusing on payment ecosystems, we will further develop areas of potential collaboration for partners, to explain how such partnerships can help to build, sustain, and scale ecosystems to support payments while addressing critical issues for their business. We hope you continue with us on this journey.
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1 Anton-Diaz, Pablo. “Why Aren’t People Saving Money in Mexico?” Center for Financial Inclusion (Blog): July 30, 2018. https://www.centerforfinancialinclusion.org/why-arent-people-saving-money-in-mexico.
2 Demirguc-Kunt, Asli, Leora Klapper, Dorothe Singer, Saniya Ansar, and Jake Hess. Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution. Washington, D.C.: The World Bank, 2018. Page 2.
3 The World Bank. Global Financial Inclusion. Washington, D.C.: The World Bank, accessed September 21, 2018. http://databank.worldbank.org/data/reports.aspx?source=global-financial-inclusion.
4 Chironga, Mutsa, Hilary De Grandis, and Yassir Zouaoui. “Mobile financial services in Africa: Winning the battle for the customer,” McKinsey & Company, September 2017. https://www.mckinsey.com/industries/financial-services/our-insights/mobile-financial-services-in-africa-winning-the-battle-for-the-customer.
5 “UFA2020 Overview: Universal Financial Access by 2020.” The World Bank. April 20, 2017. http://www.worldbank.org/en/topic/financialinclusion/brief/achieving-universal-financial-access-by-2020.
6 Demirguc-Kunt, Asli, Leora Klapper, Dorothe Singer, and Peter Van Oudheusden. The Global Findex Database 2014: Measuring Financial Inclusion around the World. Policy Research Working Paper, no. 7255. Washington, D.C.: The World Bank, 2015. Page 26.
7 “World Bank Group and a Coalition of Partners Make Commitments to Accelerate Universal Financial Access.” The World Bank. April 17, 2015. http://www.worldbank.org/en/news/press-release/2015/04/17/world-bank-group-coalition-partners-make-commitments-accelerate-universal-financial-access.
8 Demirguc-Kunt, Asli, Leora Klapper, Dorothe Singer, Saniya Ansar, and Jake Hess. Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution. Washington, D.C.: The World Bank, 2018. Page 8.
9 The World Bank. Global Financial Inclusion. Washington, D.C.: The World Bank, accessed September 21, 2018. http://databank.worldbank.org/data/reports.aspx?source=global-financial-inclusion.
10 Jain Amit, Olga Zubenko, and George Carotenuto. A Progressive Approach to Financial Inclusion. MasterCard Advisors, October 2014. Page 9-10.
11 Pascaline Dupas, Dean Karlan, Jonathan Robinson, and Diego Ubfal. “Banking the Unbanked? Evidence from Three Countries.” American Economic Journal: Applied Economics 10, no. 2 (April 2018): 257-97. https://doi.org/10.1257/app.20160597.
12 The World Bank. World Development Indicators. Washington, D.C.: The World Bank, accessed September 21, 2018. http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators.
13 Digitizing Wage Payments in Bangladesh’s Garment Production Sector. Better Than Cash Alliance, March 8, 2017. Page 4.
14 Ibid, Page 1.
15 Increasing Factory Worker Well-Being Through Digital Payroll. Better Than Cash Alliance, June 11, 2018. Page 1
16 Digitizing Wage Payments in Bangladesh’s Garment Production Sector. Better Than Cash Alliance, March 8, 2017. Page 9.
17 Ibid, Page 6.
18 Mariñez, Jorgette, Chhavi Ghuliani, and Marjolaine Chaintreau. “The Digital Payments Opportunity: A Conversation.” Business for Social Responsibility (Blog), June 15, 2018. https://www.bsr.org/en/our-insights/blog-view/the-digital-payments-opportunity-a-conversation.
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19 Blumenstock, Joshua E, Michael Callen, Tarek Ghani, and Lucas Koepke. “Promises and Pitfalls of Mobile Money in Afghanistan: Evidence from a Randomized Control Trial.” Proceedings of the Seventh International Conference on Information and Communication Technologies and Development, no. 15 (May 2015). http://dx.doi.org/10.1145/2737856.2738031.
20 Improving Company Profitability Through Digital Payments. Better Than Cash Alliance, June 11, 2018. Page 1.
21 Mastercard Government Services & Solutions Case Study: Egypt Ministry of Finance Prepaid Payroll Card. MasterCard, 2013. Page 1-3.
22 Mastercard Presentation. Case Study #2: Government Payroll Disbursement in Egypt. July 27, 2018.
23 “Global Consumption Database: What the Data Tell Us.” The World Bank, accessed September 21, 2018. http://datatopics.worldbank.org/consumption/market.
24 Innovation in Electronic Payment Adoption: The Case of Small Retailers. Washington D.C.: The World Bank, June 2016. Page 11.
25 Nixon, Kanali. “Safaricom’s “Maisha Ni M-PESA Tu” Campaign to Reward M-Pesa Customers and Agents.” Medium, June 18, 2018. https://medium.com/@NicKanali/safaricoms-maisha-ni-m-pesa-tu-campaign-to-reward-m-pesa-customers-and-agents-ec36e79d085d.
26 Innovation in Electronic Payment Adoption: The Case of Small Retailers. Washington D.C.: The World Bank, June 2016. Page 14.
27 Building Electronic Payment Acceptance at the Base of the Pyramid to Advance Financial Inclusion. Mastercard, September 13, 2017. Page 35.
28 The Future of Supply Chains: Why Companies are Digitizing Payments. Better Than Cash Alliance, June 11, 2018. Page 4.
29 Loeb, Brian. The Response of Large Corporates and Their Value Chains to Government Policies to Shift to Digital Payments: Nigeria’s “Cashless” Policy. Better Than Cash Alliance, August 27, 2015. Page 17.
30 “Pakistan leading country for Masterpass QR payments in 2017.” Business Recorder, March 27, 2018. https://fp.brecorder.com/2018/03/20180327354899.
31 “Agriculture and Food: Overview.” The World Bank, last modified September 25, 2017. http://www.worldbank.org/en/topic/agriculture/overview.
32 “Agriculture Finance & Agriculture Insurance.” The World Bank, February 2, 2018. http://www.worldbank.org/en/topic/financialsector/brief/agriculture-finance.
33 Understanding the Demand for Financial, Agricultural, and Digital Solutions from Smallholder Households: Insights from the Household Survey in Uganda. Consultative Group to Assist the Poor, May 2017. Page 15.
34 “Mastercard Launches Mobile Marketplace to Digitize East Africa’s Agricultural Sector.” Mastercard, January 17, 2017. https://newsroom.mastercard.com/press-releases/mastercard-launches-mobile-marketplace-to-digitize-east-africas-agricultural-sector.
35 Mapping Financial Flows in Sub-Saharan Africa. Mastercard & The Fletcher School. February 8, 2018.
36 Understanding the Demand for Financial, Agricultural, and Digital Solutions from Smallholder Households: Insights from the Household Survey in Uganda. Consultative Group to Assist the Poor, May 2017. Page 16.
37 Development Report 2008: Agriculture for Development. Washington, DC.: The World Bank, 2007. Page 6.
38 “Mastercard Launches Mobile Marketplace to Digitize East Africa’s Agricultural Sector.” Mastercard, January 17, 2017. https://newsroom.mastercard.com/press-releases/mastercard-launches-mobile-marketplace-to-digitize-east-africas-agricultural-sector.
AuthorsThis paper was written in partnership with Mastercard’s New Consumers Team and Accenture Development Partnerships. The secondary research was conducted by Accenture Development Partnerships on behalf of Mastercard.
Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Incorporated. ©2018 Mastercard. All rights reserved.
Authors Dan Salazar Director, New Consumers Team
Antonio Marra Vice President, New Consumers Team
Contributors Sue Kelsey Executive Vice President, Global Prepaid
Laura Mackenzie Senior Vice President, New Consumers Team
Mark Degenhart Consultant, Accenture Development Partnerships
Jenny Yeung Senior Analyst, Accenture
Prat Panda East Africa Lead, Accenture Development Partnerships
Tom Abell Financial Inclusion Lead, Accenture Development Partnerships
