Financial Inclusion

As payments technology and business models advance, at an ever more rapid pace, the risk of people being marginalized and left behind increases.  Those people who are not ready to live digitally – often the poorest in society – suffer increased costs in their daily lives which might be termed a poverty premium.  P20 believes that the global payments industry has a responsibility to ensure that every person has access to at least one mainstream payment method.

The march towards what some have termed the “Cashless Society” has quickened.  Cash use is declining but P20 believes that it will never be eliminated.  Some of the most vulnerable in society still rely exclusively on cash and more still do so in part.  And a majority still see cash as a safe haven during a crisis.  But the cost and risks of handling cash is high and many businesses would prefer only to accept card, digital and electronic payments.

This has led some businesses to decline cash, prompting  several governments  to respond by mandating that cash must be an acceptable form of payment by retail businesses.  P20 believes that whilst the use of cash will decline, it is incumbent on the industry together with government and regulators to develop an inclusive approach with solutions that promote inclusion and do not exacerbate exclusion. 

P20 will work with all stakeholders to identify the obstacles which prevent easy payment participation by the unbanked and underbanked.

 

  • 14.1 million people (6%) are unbanked in the USA

  • 1.2 million people (2%) are unbanked in the UK

  • Cash transactions in the UK are falling and forecast by 2028 to be 9% of the total

  • 8 million people in the UK would struggle to cope in a cashless society

  • Contactless is becoming a more popular payment method – Canada +30% since 2017, UK +31% since 2017, USA +150% since March 2019

(Source: FDIC, FCA, UK Finance, UK Government, Payments Canada, Visa)

 “Businesses should exploit technology but not at the cost of leaving people behind.  It is not right to go to a cashless society if people are left behind.”

Rt Hon John Glen MP
UK Chief Secretary to the Treasury

 “Financial inclusion is just part of the journey.  How do we figure out a way to take our best practices and ensure that it is the quality of life at the end, not the simple fact that they have an account, that determines that people are truly financially included.  We should continue to raise the bar and set those goals high.”

Carlos Menendez
President, Enterprise Partnerships
Mastercard