The great unbanked

Cash Elimination From Informal Economies


Cash is expensive and carries security risks for all parties in the payments chain. Cash is often used by the most underprivileged and underbanked, which often leads to more expensive cost of services.


1. How to incentivize usage? Previous digital payment projects have failed in townships, favelas and barrios due to the acceptance versus issuance conundrum

2. Which format is best? Residents of informal settlements primarily have access to basic feature phones, but mobile coverage is good

3. Who to partner with? Financial inclusion projects are complex and require a unified, multi-pronged approach


1. Distribute free mobile point-of-sale devices and offer discounts for digital SME banking, partner with the merchants to push digital discounts to customers who transact electronically. Make it simple for merchants to participate and avoid the registration barrier that reduces ubiquitous acceptance. Use digital discounts to drive and track loyalty in the mobile app so consumers see benefit of moving from cash. The reduced cost to operate ATMs and manage cash for the bank can fund the mobile POS distribution and customer offers. It becomes a first rung on the digital ladder for both SMEs and consumers.

2. Issue a mobile app to consumers available on smartphone or featurephone that allows P2P currency payments from a digital wallet mapped to the individual’s government-issued identity already leveraged by banks for accounts. This avoids the previous failings of mobile payments that transferred value to airtime on cell phones, or credits that couldn’t be spent in the same way as cash.

Through digital payments they can have access to reduced costs around regular payments, such as utilities, as well as better budget controls in app. Many families in these environments share a single mobile phone, so the app needs to allow for multiple profiles stored on the same device. Those profiles may be separate accounts, or hierarchies within a single household account, that allow for the parent or budget holder to monitor and manage spending across their family. The alias for the account must be the government identity, perhaps combined with biometric log-ins built into the smartphone, but it cannot be the cell phone number.

3. Secure government participation to promote the financial inclusion element; education of consumers and merchants is vital. There needs to be regulation, rewards or both for accelerating the cashless environment. These could be around discounts on government taxes for paying digitally. Many informal economies operate on cash because the individuals like it; cash is anonymous, ubiquitous and there is a direct connection in the trade relationship. It is simple and tangible. They often believe they will be better off in terms of associated costs, but the risks associated with theft or loss of cash are also very real in these environments. A multi-pronged approach that emphasises the reduced risks, reduced cost to live and associated rewards is necessary to create a cashless economy. 

The elimination of cash also captures a new customer base that is going to become valuable. These communities are the future middle classes in their countries, and offering them a service tailored to their current needs is a low-cost acquisition model to capture their future business. 

CX optimization

Introduce more advanced spending control personalization in the app to allow families on a tight budget to restrict transactions across their account hierarchy based on merchant type, location, transaction values and more. 

Leverage real-time payments to ensure a real-time balance for users who live on a daily or weekly wage, and overlay request-for-payment services for utilities/bills, taxes or installment plans, allowing them to better control their cashflow.

Offer in-app, low-cost international money transfers for migrant workers who send most of their earnings home.

New Payments Use Cases

Select another use case.

Consumer Payment Processing Solutions

Discover innovative use cases that drive more value from your existing ACI solution.

ACI Low Value Real-Time Payments Solution

Discover innovative use cases that drive more value from your existing ACI solution.

Let’s Talk

Our payment experts are ready to help you tackle your payment challenges. Set some time to speak today!