Lessons from Incentives Encouraging Digital Payments

The World Bank’s Financial Inclusion Global Initiative (FIGI) has issued a paper investigating Incentives for Electronic Payment Acceptance (EPA) ¹. The report was funded by the Bill and Melinda Gates Foundation.

The paper explains why electronic payments are beneficial, how they are incentivised and makes recommendations for their acceleration in the face of the slow transition away from paying with cash of many micro, small and medium retailers (MSMRs) in emerging economies.

The paper reviews economic, policy and infrastructure incentives used around the world direct to merchants and indirectly to consumers and Payment Service Providers (PSPs). The focus is on MSMRs, although much of this also applies to larger retailers.

Critical editorial comment

In light of all these entities having to work so hard to move people to electronic payments, it is a shortcoming that the paper does not investigate what might be lost if cash payments decline to a point where they are uneconomic.