2.4.4. Build Payment Systems
Cash-only economies limit enterprises and consumers from reaching their potential. They are limited to in-person transactions, and at a relatively low cost, considering the resulting insecurity consumers and enterprises feel when having a significant amount of cash on hand. It is additionally difficult for enterprises to obtain investments from sources outside of their immediate community. USAID holds expertise in supporting digital payment systems, from physical banking with electronic credit cards, to mobile banking, which may be more appealing in rural markets.
- Ease / cost of collecting payments
- Transaction costs associated with originating and managing loans to target sector/region
MUST HAVE’S, CRITICAL POINTS, OR QUESTIONS TO CONSIDER
In Afghanistan, police salaries were paid infrequently and inefficiently.This had a significant effect on the morale of the Afghan police force.
USAID helped the government pilot the use of mobile money to pay police salaries, which resulted in timelier and more efficient payments.
Many police previously paid in cash reported a 30 percent payment increase, when in fact they were receiving their full salaries for the first time. As a result, government is now adopting mobile technology to replace cash payments and collections for civil servant salaries and electricity bills.