How to create digital economies —Report

For the first time, new evidence from 25 countries in Africa and abroad, have shown how governments and companies can move away from cash, as McKinsey Global Institute reveals a potential $3.7 trillion GDP boost.

A new report from the United Nations-based, Better Than Cash Alliance, unveils 10 tangible steps governments and companies can take to leave behind a cash-dominant economy and embrace digitisation of payments.

The new report comes just as McKinsey Global Institute released projections that digital finance could lead to a $3.7 trillion GDP boost by 2025, create 95 million new jobs across all sectors, and save $110 billion annually in leakages in emerging countries.

There is a large amount of evidence supporting the benefits of transitioning from cash to digital payments, but implementation is often difficult for governments to do on their own.

This is in part because successfully creating an economy where digital payments are widely available requires a collaborative approach between many players in the public and private sectors.

The Better Than Cash Alliance research studied 25 countries including India, Nigeria, Tanzania, Ghana, Brazil and Mexico. What emerged were 10 ‘accelerators’ or actions that regularly proved to make a strong impact in advancing the creation of economies where digital payments are widely available.

“The new McKinsey Global Institute study on digital finance for all should inspire emerging countries’ leadership to move quickly on creating economies where digital payments are widely available,” said Dr Ruth Goodwin-Groen, Managing Director of the Better Than Cash Alliance.

“We also released a study that shows how governments and companies can rapidly shift away from cash. Building a digital economy can take significant work, but as the new data shows, it is completely achievable and will drive inclusive growth, helping people lift themselves out of poverty,” she added.

This report also highlights the ever increasing importance of transitioning to digital payments. The data compiled in the report provides evidence of the benefits that digital payments bring.