Donors and governments around the world recognize the power of government-to-person (G2P) payments to address poverty and benefit women. Not only do multiple impact assessments validate the value of digitizing cash payments, but a growing number of innovations show how to make payments delivery more valuable with improvements from biometrics, form factors, delivery channels (agents/ATMs) and means of communication. These innovations can be powerful levers of change for the 12 percent of adults, according to Findex 2017 data, who receive government transfers — a group that is disproportionally poor and female. For women in particular, these innovations can amplify a cash transfer into a lever for greater economic empowerment.
While many improvements matter, we hold that the most valuable innovation is in delivery systems that empower women to choose how to receive their cash. G2P programs often reach millions of people and have the potential to stimulate private providers to competitively extend services further. However, most often governments require beneficiaries to use a single G2P solution. A better approach is when governments stimulate a marketplace of many competing solutions. What if they enabled women to select what works best for them from among several solutions and to reward high-quality service providers with their business?
Emerging evidence (and common sense) gives us reason to be optimistic that when women can choose where, when and how to receive their funds, their gains are amplified. They can seek the best combination of privacy, friendly service, cost and user interfaces. CGAP has detailed the rationale for giving women greater choice in G2P solutions in publications and case studies on Bangladesh, Kenya and Zambia.
Emerging evidence points to two compelling rationales for opening the choice of payment delivery services.
1. Choice enables women to select what works based on their needs and preferences
Women’s circumstances and considerations are so diverse that no one design for G2P improvement could optimize the G2P experience for all women.
Consider the Women’s World Banking study on Indonesia’s Program Keluarga Harapan (PKH), which provides conditional cash transfers to nearly 10 million women. These women range from 30 to 65 years of age. Ten percent own a smartphone, 29 percent own a feature phone and 35 percent have no phone at all. They vary further by literacy, religion and occupation. Indonesia’s archipelago of 17,000 islands includes regions like Jakarta with high-end financial infrastructure, but there are many regions, like Papua, with very few banking services. No single account type, provider or form factor could ever optimize the G2P experience for all of these women. And why would we expect it to?
Women should be able to select what works best for them. A recent (unpublished) World Bank evaluation of a female-targeted G2P program in Zambia, conducted by the firm Pi Strategy, illustrates the power of choice. The program allows end-recipients to choose among six payment providers. Selection of the mobile money provider Airtel rose from 14 percent in remote areas to 35 percent in areas near markets, on account of a greater agent presence in urban areas. Mobile money provider MTN saw an inverse pattern, with more remote recipients shifting preferences to MTN due to MTN’s greater rural agent presence. When these options are well communicated, women can make choices best suited to their individual circumstances.
Even within the same region or town, women’s negotiating power and relationships within the household can vary substantially and affect their preferred G2P solution. For instance, studies looking at women’s control over cash transfers find that while women generally place high value on control and privacy, there is wide variation. Some prefer the convenience of a shared account on a household phone, while others prefer the control afforded by an account that requires biometric verification. These recent findings from Zambia highlight the complexities of women’s considerations.
The optimal choice every woman makes is a complex equation of service proximity, cost, brand affinity and family dynamics that only she knows. The goal of well-designed G2P should be to communicate and make available a range of good options, rather than pick a single “best” solution.
2. Choice creates a marketplace where women can reward better customer experience and lower costs
There is strong evidence that digital financial services (DFS) providers offer lower-quality service to women than men. In Uganda, mystery shopping for digital credit conducted by IPA found that men were much more likely to receive an explanation of the costs (66 vs. 23 percent) and more likely to learn the total cost of credit (58 vs. 41 percent). In India, surveys with garment workers found that 29 percent of women reported problems that men never did, such as unhelpful staff or bank hours.
In many places, women’s lower levels of literacy and familiarity with digital technology make them targets of fraud. Financial diaries of garment workers in Bangladesh showed that over a third of women workers who were paid digitally required assistance to cash out. Recent evidence from another study in Bangladesh suggests that those users with less digital literacy who ask for help from mobile money agents are 44 percent more likely to be charged an informal fee than more digitally literate users.
When G2P programs select the DFS provider for their beneficiaries, there are few ways to remedy women’s complaints about poor service or transfer their business elsewhere. The power to choose enables women to take their business to service providers who offer friendlier service, charge less and are more trustworthy.
One popular recommendation is for providers to hire more women agents, who are more approachable for women customers. While important, this strategy alone will not address the fundamental power asymmetry that often leads to informal fees and poor service for women. Offering options will empower women to reward agents who offer better service. If women seek out female agents, providers will be incentivized to recruit and retain more women agents and sustain better service.
One data point on the positive influence of competition emerged during the pandemic in India. The volume of G2P withdrawals at agent locations not sponsored by a recipient’s bank (“off-us” withdrawals) tripled, according to the National Payments Corporation of India. This behavior reflects the fact that India enables recipients, often women, to choose from a range of options where to receive their cash. It also sends a market signal to providers about advantageous places to locate points of service. Choice makes these market signals possible.
No single innovation alone is a magic wand to solve all challenges. More G2P programs around the world are starting to give beneficiaries choices while also incorporating new tools to improve program design, better monitor beneficiaries’ experiences and enable more responsive grievance redressal. Women know what they need from G2P payments, and policy makers can make dramatic strides to meet those needs. As countries like India, Kenya, Zambia and others demonstrate, the pathway ahead is ever more clear: let her choose.