Research & Analysis

Testing the Waters: Digital Payments for Water and Sanitation

A growing number of water providers are experimenting with digital payments to reduce operational expenses and streamline service delivery. To better understand their experiences and what they may mean for other water providers in emerging markets, CGAP and GSMA studied the experiences of 25 organizations across Africa, Asia, and Latin America. This paper describes our research and highlights the lessons learned, including the benefits and the challenges these organizations encountered while digitizing their payments.

Benefits of Digitizing Payments

  • Digital payments reduce collection costs.
  • Digital payments increase revenue and enable new business models.
  • Digital payments also increase customer reach.

Digitizing payments also have benefits beyond financial considerations: they create data trails that enable providers to offer a higher level of service and improve customers’ willingness to pay. They also facilitate the digitization of other business functions like billing, meter-reading, and customer service, all of which contribute to greater efficiency.

Obstacles to Digitizing Payments

  • Difficulty integrating mobile money providers.
  • Too few mobile money users.
  • Fees can deter customers.
  • Limited ability to analyze data.
  • Loss of jobs.

Digitizing payments will not solve all the challenges facing water providers as they struggle to become sustainable. However, it delivers clear benefits when it is based on careful analysis and strategic decision making. Water providers in emerging markets should give serious consideration to going digital.


Website photo credit: Alessandra Argenti, World Bank