Pakistan invited to play leading role in cashless economy

Pakistan has potential to lead to transform into a cashless economy by shifting from conventional mode of cash payments to electronic ones which now have becoming preferable for being cost saving, transparent, speedy and secure, Managing Director Better Than Cash Alliance, Dr Ruth Goodwin-Groen said.

While talking to a selected group of journalists, Dr Ruth said the United Nations-backed alliance would ask Pakistan to join the group which already had over 30 members, while the registration of several other countries was in process.

She said Pakistan had tremendous potential to exploit as just 10 per cent of its population were utilizing banking services and 90 per cent were still away from these services.

The Better Than Cash Alliance is UN-housed alliance of governments, the development community and companies committed to empower people by shifting from cash to electronic payments.

The alliance works closely with the World Bank, the Consultative Group to assist the poor, the World Economic Forum and is an implementing partner of the G20 Global partnership for financial inclusions.

Talking about the benefits of the alliance, Dr Ruth said the biggest generators of payments globally, estimated offer US$40 trillion in 2009, with millions of people in developing countries receiving salaries benefits and pensions through government-to-people payments.

She said the financial services were often difficult and expensive to provide to poor people at scale.

As a result, most of these households are forced to subsist almost entirely in an informal, cash-only economy, making it difficult to save for the future, build assets and move out of poverty.

She said when governments shift payments from cash to electronic distribution – mobile phones or by prepaid cards – there were lasting benefits for people, communities and economies.

She said the electronic payments decrease costs and increase efficiencies, citing example of Mexico, where the government trimmed its spending on wages, pensions and social welfare by 3.3 per cent annually, or nearly $1.3 billion by centralising and digitising its payments.