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‘We need a human touch to end reign of cash as king in Africa’


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In a world where bitcoin and cryptocurrencies capture newspaper headlines, it might be hard to believe that cash is still king—but in most of the world, it is.

From Africa to Germany, the majority of transactions are done in cash. Ninety-four percent of retail transactions in Africa are still conducted in hard currency and nearly 80 percent of all transactions in Germany are also carried out in cash. Uber launched with 100 percent digital payments in the United States, but had to change its strategy in India, where Hyderabad drivers were the first to accept cash. As the company expanded to Kenya and Nigeria, they added a cash option but went even further by accepting “digital cash”, or payments made outside the app using mobile money. To scale in markets with low digital payment penetration, they had to mix online and offline transactions to offer consumers an option they were used to—cash payments.

Ultimately, what drives how people to choose to pay for everyday purchases is not defined not by one thing—like what form it takes, or who accepts it—but by how well it succeeds in bringing together two very basic human needs: faith and flexibility.


A shopkeeper counts out change above her cash box at her shop in Hillcrest, west of Durban, South Africa, January 11, 2016. Rogan Ward/Reuters
Africa’s reputation as a leader in the adoption of financial technology is not because the region pioneered a new technology. Mobile-money operators have succeeded because they have blended technology into an existing culture and ecosystem that was “offline” and engendered trust of consumers.

Mobile money operators leverage small retailers called agents, who offer cash-in and cash-out services to consumers. In some countries, operators allow the agents to perform transactions on behalf of the consumer. While these services are technology-based, cash is still at their core: customer pay agents in cash and funds are transferred to other users, who withdraw the cash from another agent.

Today, mobile money is a strong competitor to cash transactions in Kenya. With more than 35 million subscribers across multiple operators, nearly 50 percent of the country’s GDP passes through these networks. By introducing local retailers, who consumers trust, into the digital payments ecosystem, mobile-money operations across the region have witnessed strong growth. Trust is established because of the face-to-face engagement, which currently outweighs faith in machines.

A man waits for M-Pesa customers at his shop in Kibera in Kenya’s capital Nairobi December 31, 2014. M-Pesa is a popular mobile money transfer service. Noor Khamis/Reuters Digital payments are a convenient way to quickly send and receive money, and create transaction histories that demonstrate eligibility for credit. But to transition to a fully digital payments world, we need to leverage human interaction to build faith in the system in emerging and developed markets alike.

BNP Paribas, one of France’s largest banks, recently acquired Compte-Nickel, a fintech start-up. Compte-Nickel’s innovation was simple—bring banking and digital payments to communities through the neighbourhood newsstand. Consumers visit the newsstand, open a bank account, and receive a debit card in less than five minutes. At the time of acquisition, Compte-Nickel had 2,500 agents, which made it the largest network for financial services in France. The success of Compete-Nickel is based on leveraging a trusted agent—similar to the mobile-money networks pioneered across Africa.


Fully digital services like Venmo, America’s largest P2P money transfer network, are also learning that the convenience of digital services cannot escape customer’s faith that comes from human interaction. When the company launched, it had just a dozen representatives shooting off emails. After a chorus of complaints, the service not only now offers a 24/7 phone number to call, but employs over 130 full-time employees to manage the 4,000-5,000 time-sensitive inquiries it receives every day. Venmo’s shift is a sign that complete automation won’t be achieved soon. Even as innovative mobile platforms become popular, human connections play an integral role in ensuring that users trust the service.

The digital payments technology landscape is evolving at a rapid pace, but adoption has not yet caught up. For cash to stop being king, we need to embrace methods that build consumer faith in digital systems.

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