In my line of work, I’ve had the opportunity to work on marketing communications and PR strategies for some Digital Financial Services (DFS). And for most briefs I have worked on, ‘Cash’ has always featured as a competitor. Rightly so, if we want people to switch from using physical cash to digital financial services, then people will have to reduce their reliance or even usage of physical cash entirely. In the absence of cash, digital financial services become a viable alternative.
According to the World Bank, access to affordable financial services is critical for poverty reduction and economic growth. The more developed a country’s financial system is, the higher the chances of that country reducing poverty and income inequality among its populace. For there to be inclusive access to financial services, technology plays a major role, which is why digital financial services like mobile money have become necessary. When individuals are excluded from the financial system, they do not have access to financial products and services. They cannot transact, make payments, save and have access to credit or even insurance because no one knows their creditworthiness. So in the case of emergency, these excluded individuals are left vulnerable.
The term Digital Financial Services, in recent times, has received several accolades. Studies have shown that DFS is the likely magic wand to drive access to affordable and useful financial services. This is because digital financial services leverage technology to deliver easy, accessible and faster financial services electronically. Meaning, instead of using physical cash, financial services – such as payments, transfers, savings, credit, etc. – are delivered electronically via mobile phones or other digital channels that people are already used to.
Like many parts of the world, Ghana is on a journey toward a cash-lite economy; an economy that is less dependent on cash and more reliant on digital transactions. All the important elements needed to go ‘cash lite’ are being put in place: there is a national payment systems infrastructure provider, a payment systems Act, a viable financial technology provider’s ecosystem with a booming mobile money space, among others. Yet, cash still has a strong hold on the masses. As a matter of fact, the 2023 edition of the Global Payments Report by FIS indicates that even though there is a projected decline in the usage of cash globally, it continues to play an essential role in most economies.
The kingship of cash in Ghana’s economy is not in question in my estimation. Cash is still very much the most preferred option for most financial transactions. The proliferation of digital financial services like mobile money has not impacted significantly on the reliance on cash, especially among the underbanked. If the country truly wants to reduce its reliance on cash because of the obvious benefits of digital financial services, then the DFS industry has to pick some lessons from cash. The industry needs to simulate the characteristics of cash that make it the preferred option; and then present these characteristics in a way and a manner that offers users value. Cash is not the competition or even the ‘enemy’. I think it’s the standard that needs to be studied and carefully replicated in digital form.
People have trusted cash for several years. Cash is understood. It works seamlessly and does not require extra effort to use. For digital financial services to compete and somewhat reduce ‘Cash’s market share’, it will need to provide a significant value proposition that is better and stronger than what cash offers. So, the question is, how can DFS present a solution that is just like cash?
- Cash is easy to understand: When it comes to understanding what cash is and how it works, it’s basic. You don’t need a ‘university degree’ to figure out what cash is and how it should be used. People understand cash regardless of their educational or social status. We literally know cash like we know ‘our palms’. Understanding cash is devoid of all technical jargon and complexities. Digital financial services should begin to break down their complexities in languages and forms that are easy to understand. For effective adoption of digital financial services, digital literacy is key. DFS providers should help users acquire the necessary skills, knowledge, confidence and competencies needed to safely use digital financial services. Understanding DFS should be easy like understanding physical cash.
- There are no system downtimes with cash: People tend to trust physical cash more than they trust digital financial services because of the user experience. There is nothing like ‘failed transactions’ when using physical cash. Compared to cash, the recourse mechanism for customers to lodge and have their complaints resolved is often cumbersome for digital financial services. If DFS wants the complete trust of customers, then providers need to provide an experience that is seamless. Just like cash is easy to use, user interfaces and DFS processes should be easy to understand and There should be a fine blend of security and convenience. If DFSs want to replace cash, they need to give assurance that they are up to the task.
- Customer-centric design: The whole workings of physical cash give a human centred design approach vibe. Cash is basically ‘designed’ around the needs of customers. Cash is tailored to meet the needs of its users. Its design, circulation and management are done with users in mind. So it’s easy for people to connect with cash regardless of the disadvantages projected in comparison with digital financial services. People will use what they know and understand, not what technology providers say is ‘best for them’. Digital financial services will only be appealing to people if the technology design starts with the people and ends with solutions that meet their needs better than cash will ever be.
- Universal acceptance: Physical cash enjoys universal acceptance. Cash ensures that everyone, regardless of their economic background or access to technology, can participate in economic activities using cash. We know the power of digital financial services to expand access and drive inclusion; however, for people to trust its abilities, DFSs must work on their acceptance channels. People accept cash because they know and understand how it works. Digital financial services must strive to achieve a similar level of acceptance.
- Cash is inclusive: Access to cash is a fundamental right. It is available to just about anyone without restrictions or barriers. You can have access to cash regardless of your ability or inability to read and write. Digital financial services should provide this level of inclusivity for users.
Digital financial services, compared to physical cash, undoubtedly have the potential to lower costs, increase speed, security and expand access and allow for more tailored financial services that will drive inclusion and expand access. Ghana has made significant progress, and the industry has all it takes – technology wise – to effect the needed behavioural change. But like it is said, it takes more than a good product to drive usage and adoption. Rather than viewing physical cash as the ‘guy’ standing in the way of DFS, it is essential to recognise the intrinsic value cash holds and understand why it remains a preferred payment method for many. The industry needs to work together on addressing all the barriers hindering adoption of DFS. Collaborating to ‘win’ should be the watchword.
Eunice is on a mission to demonstrate the value PR brings to financial technology companies. She is an experienced Corporate and Marketing Communications professional, a CIPR Accredited PR practitioner, and a Certified Digital Finance practitioner with over 12 years of professional experience; ten (10) of which have been in the financial technology industry, working for a national payment systems infrastructure provider. She is a Digital Finance Literacy advocate, a member of IPR Ghana and Women in PR Ghana. She can be reached via email at [email protected]. You can also connect with her on LinkedIn: Eunice Asantewaa Ankomah.
