(1) The electronic delivery of cash can be achieved through
a variety of mechanisms - debit card, smart card or
cellphone, using a range of financial infrastructure -
banks, automated teller machines (ATMs) and point of- sale (POS) devices. This brief outlines recent
experiences from across Africa, with a focus on Kenya,
Malawi, Namibia and Swaziland.
(2) The benefits of electronic delivery systems to both
governments and recipients are well known in terms
of improved cost efficiency and flexibility of access, so
this brief emphasises issues that are relevant to private
sector partners, who are vital to the introduction of
such systems.
(3) The rapid penetration of cellphones in Africa, including
both signal coverage and handset ownership,
makes distribution of cash transfers by cellphone an
increasingly viable proposition, as shown in Kenya
through the M-PESA mechanism. Additionally the
availability of cellphone signal has been instrumental
in facilitating use of offline smart cards for electronic
delivery of cash transfers in Malawi and Namibia.
(4) The growth of financial infrastructure and opportunity
for banks to increase their market share has increased
the favourability with which banks view potential
participation in government-to-person cash transfers.
Evidence from Malawi and Swaziland shows that
cash transfer recipients who are provided with bank
accounts to receive their cash transfers tend to then
use them to save money and to receive person-to person
transfers (e.g. remittances) – thus making
further use of financial infrastructure and services.