Courtesy Ruth Goodwin-Groen

Ruth Goodwin-Groen (MBA 2001) has a lot of work to do. “Our job will not be done until all people—old or young, rich or poor, male or female—are able to make and receive payments in a way that works for them,” says Goodwin-Groen, managing director of the Better Than Cash Alliance, a public-private partnership based at the United Nations.

Today, 100 million unbanked adults worldwide receive government transfers, wages, or pensions in cash, a payment method that is highly vulnerable to fraud and theft. Furthermore, 1.7 billion adults lack a bank account, making it difficult to save money or establish a financial history. Goodwin-Groen’s career-long commitment to international development led her to start the Better Than Cash Alliance—now a consortium of 75 governments, corporations, and international organizations—in 2012 to address these issues. The partnership is funded by the Bill & Melinda Gates Foundation, BMZ, Flourish, Mastercard, Norad/Vipps, the Swedish International Development Cooperation Agency, the US Agency for International Development, and Visa, and hosted by the United Nations Capital Development Fund (UNCDF).

Digital payments increase savings, security, and transparency for both the payer and the recipient, and they can serve as the spark for larger societal change, Goodwin-Groen explains. “Digital financial inclusion can build a foundation for achieving the United Nations’ Sustainable Development Goals. Whether it’s improvements in sanitation or health or education, it starts with a payment system everyone can use.”

Goodwin-Groen offers the example of a mother who has to pay for her children’s schooling once each semester. She needs to save money for several months to do so; in low-income countries, education costs can be as much as one-third of a household’s annual income. If she receives payments in cash, her savings could easily be stolen or perhaps used by a male relative (men have more financial power in many cultures) for another purpose. If, instead, the woman receives digital payments, often via mobile phone, to an account in her name, her savings are less susceptible to theft and she can maintain control of the funds to ensure they are spent on school fees. When she then pays the school via digital transfer, the mother begins to build a financial history. “She is building up a track record for her future,” says Goodwin-Groen, “which can allow her access to credit or other services. She can begin to plan or grow a small business and make other investments in her household.”

In an experiment in Kenya, access to a digital savings account boosted high school enrollment by 5 percent to 6 percent. In Nepal, households headed by women with digital savings accounts increased their education spending by 20 percent. On the other side of the equation, digitizing teacher salary payments in Liberia reduced the time and cost of collecting a paycheck. Teachers saved an average of 92 percent in fees and 13.5 hours per paycheck. The time saved could be spent in the classroom.

The Better Than Cash Alliance advocates for responsible digital payments and provides guidance to governments, corporations, and international organizations in their transition efforts. It also helps these groups attract the necessary financial investments. “There is no blueprint, as every member is at a different place,” says Goodwin-Groen. “Our role is to help create opportunities for investment in this sector.”

One of our biggest challenges, Goodwin-Groen observes, is translating the complexities of the financial payments sector into a language that can be understood by policymakers, politicians, and all those who will use the system. “We need to break down the barriers and make it accessible for everyone who is going to be a part of the digital payment ecosystem,” she says. “Our mission is to catalyze a global movement from cash to digital payment so that all people have the ability to improve their lives.”

The work of the Better Than Cash Alliance is especially urgent in the midst of the COVID-19 pandemic. “As we showed five years ago during the Ebola crisis, that to respond quickly and effectively, it was essential that all key public and private sector players work together to deliver payments digitally,” Goodwin-Groen says. “Those companies and governments that took action and can pay all their front-line workers and citizens digitally are today responding quickly and effectively. For the others, there is now a digital payment imperative. Our work has never been more important.”

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