What if physical cash was not the enemy but the standard?

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 on 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.

This 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. And so in the case of an 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 towards 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, and 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. 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 then 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 its complexities in languages and
forms that are easy to understand. For effective adoption of Digital Financial
Services and digital literacy are 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 a seamless experience. Just like cash is easy to use, user interfaces and DFS processes should be easy to understand and use. There should be a fine blend of security and convenience. If DFS wants to replace cash, it needs to give assurance that it’s up to the task.  

Customer-centric design: The whole workings of physical cash give a human-centered 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, DFS must work on its 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 recognize 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 the adoption of DFS.

Collaborating to “win” should be the watchword.