This post originally appeared on the Better Than Cash Blog
Today, Visa joins with six partners from government, the private sector and the international development community to launch the Better Than Cash Alliance. Working together with our other founding members – the United Nations Capital Development Fund, the U.S. Agency for International Development, Citi, the Bill & Melinda Gates Foundation, the Ford Foundation, and Omidyar Network – the Alliance will help bring many of the world’s 2.5 billion unbanked people into the financial mainstream by providing them with resources that are safer and more useful than physical cash.
Around the world, governments, the development community and the private sector are making billions of dollars in cash payments to the poor – in salaries, pensions, emergency relief, social aid and more. Making these payments in physical cash or in-kind goods costs poor people time and money and can be unsafe.
To begin with, people in developing countries often have to travel great distances just to collect cash payments. That can mean days away from work and their families and, worse, the risk of being robbed on the journey back. Delivering cash to poor recipients often involves several couriers – and if any of these intermediaries pocket part of the amount, cash is impossible to track.
For anyone without a bank account, cash also is hard to save. Shifting payments to electronic or mobile payments offers more security and convenience – and, more importantly, an onramp to financial inclusion by providing easier access to accounts they could use to save, get a loan or make payments of their own.
At Visa, we are proud of the work we are doing already around the world to help governments enable the electronic delivery of social benefits and other disbursements. For example, in Mexico, Visa works with the government-owned Bank of National Savings and Financial Savings (Bansefi) to distribute social program benefits via Visa debit and prepaid cards to 6.5 million people, giving recipients opportunities to use financial services to save, budget and improve their lives.
In the Dominican Republic, Visa and the government teamed up to boost the national financial inclusion rate and address theft and delay issues of government benefits by distributing reloadable Visa Solidaridad cards. Today, more than 800,000 people in the Dominican Republic receive their aid via Visa card—which also helps provide customers for local merchants as those citizens use their cards to pay for food, fuel and medicines.
Through this innovative partnership, Visa and our partners in the Alliance aim to provide governments, the development community and the private sector with the inspiration, technical expertise and financial support to commit to making the transition to electronic payments and unleash new potential to reduce poverty and promote economic development.
Learn more by visiting the Better Than Cash Alliance website.