the global cost of cash and the digital economy
TRANSCRIPT
February 15, 2016
Global Cost of Cash and the Digital Economy: A Global Benchmarking Study
SMALLEST COST OF CASH
Around the world, cash costs are higher for those who are “less banked”
Money deposited electronically
Travel to deposit cash/check
Travel to cash check
Time/Money to Travel to ATM
Check cashing + pay day loan fees
Check cashing + pay day loan fees
Pay digitally or with card
Pay digitally or with card
Pay digitally or with card
Risk theft
Risk theft
Travel to home or ATM when cash is needed
Travel to home or ATM when cash is needed
ATM fees
ATM fees*
MEDIUM COST OF CASH
LARGEST COST OF CASH
*In some countries, the unbanked can cash paychecks at ATMS or withdraw cash on pre-paid cards.
Absolute Cost of Cash
Low High
The cost of cash, including fees and the opportunity cost of time spent, varies widely across countries. High costs of cash affect countries across the income spectrum and of all population sizes.
Source: Global Cost of Cash
China
USA
India
Bangladesh
Nigeria
Average transit time and cash access costs are high in some of the world’s most populous countries
The cost of ATM maintenance is higher in parts of sub-Saharan Africa and Latin America, as well as large sparsely populated countries
ATM Unit Maintenance Cost $USD* (PPP derived)
$ 680 $ 8,876Low High
Source: Global Cost of Cash
6
AVERAGE TAX GAP
Lower Higher
Countries in the developing world tend to have a greater tax gap and a greater degree of uncertainty about the reliability of the estimate of the gap.
Source: xxxxxx
7
Nigeria
Philippines
Russia
Brazil
Japan
USASouth Korea
India
Belgium
Absolute Cost of Cash
Digi
talE
volu
tion
Inde
x Sc
ore
(201
3)
Colombia Poland
France
Germany
Spain
EgyptIndonesia
Netherlands
ChinaCzech Republic
Mexico
Hungary
Thailand
Finland
Sweden
IrelandDenmark
UK
New Zealand
Malaysia
Turkey
Estonia Israel
Saudi Arabia Slovenia
South Africa
Kenya
Italy• Colombia• Egypt• Hungary• India• Indonesia• Italy• Mexico• Egypt• Nigeria • Philippines• Poland• Russia• Thailand
More digitally evolved countries with high cost of cash have the greatest potential for unlocking value by transitioning to digital money
Sources: Global Cost of Cash, Digital Evolution Index
Countries with lower costs can still realize additional value by accelerating transition to digital money
Low High
GREATEST POTENTIAL
NEED TO INVEST IN DIGITAL INCLUSION FIRST
• Belgium• Brazil• China• Czech Republic• France• Germany• Japan• Netherlands• Spain• USA
8
Countries with high cash production costs (as a percentage of GDP) can benefit from savings by migrating to digital money
RIPE FOR SAVING
NEED TO INVEST IN DIGITAL INCLUSION FIRST TO SAVE
• Czech Republic • France• Estonia• Hong Kong• Japan• Turkey
• Brazil• Hungary • Nigeria• Philippines• Poland• Russia• South Africa• Thailand• Italy
Large % of population without bank account
Small% of population without bank account
Sources: Global Cost of Cash, Digital Evolution Index, World Bank Findex
Low High
Large % of population without bank account
Small% of population without bank account
Countries with higher levels of corruption are correlated with lower levels of digital evolution, as well as lower levels of financial inclusion
Sources: Global Cost of Cash, Digital Evolution Index, World Bank Findex, Transparency International
Bad Good
The Cost of Cash SeriesIn-depth country level insights
MexicoUSA India
Learn more: http://fletcher.tufts.edu/CostofCash
Research conducted by:
Institute for Business in the Global Contextfletcher.tufts.edu/IBGC@IBGC_Fletcher
Principal InvestigatorDr. Bhaskar Chakravorti
Analysis & VisualizationsChristina Filipovic, Caroline Troein, Yan Bai
With support from:
MasterCard Center for Inclusive Growthwww.mastercardcenter.org @[email protected]