Digital cash is harder to burn

There are multiple benefits to digital money not least that it is cheaper than cash to handle which by most estimates, costs society as much as 1.5% of GDP; it has low administration costs, reduced security costs and is traceable thus reducing the risk of loss of funds from corruption (e.g. according to a recent McKinsey report, it is estimated that 75-80 percent of the $22 billion in benefits of shifting India’s government payments to electronic would come from reducing leakage of funds in government transfer schemes ending up in the wrong hands).

Widespread adoption of digital money and connectivity has significantly increased the amount of trade taking place in emerging economies. Small businesses have benefitted from the growth of mobile and fixed line networks underpinned by maturing technology standards and protocols such as credit and debit card payment schemes. Increased connectivity is also at the core of efforts to increase financial inclusion through digital money, where a lack of bank and cash infrastructure and ability of individuals to authenticate their credentials is traditionally cited as an underlying challenge. Vodafone’s M-Pesa solution, first launches in partnership with Safaricom in Kenya demonstrates how connectivity can assist in leapfrogging traditional cash based infrastructure and create an environment where businesses can flourish. Launched in 2007 there are now 19.9 million active users of M-Pesa worldwide.