Billionaires are known for not keeping a lot of spending green in their wallets. But that’s not why Bill Gates hates cash. He hates it because of its effect on people at the opposite end of the wealth spectrum—the world’s poor and unbanked. The Better Than Cash Alliance, which was founded last September and is partially financed by the Bill & Melinda Gates Foundation, hosted a breakfast at the World Economic Forum in Davos, Switzerland. Speakers from the Philippines, Colombia, and the U.S., among other countries, made the case for why electronic transactions are better than cash payments.



Top five reasons, according to the alliance:



Transparency: Less corruption and theft when payments can be easily tracked. In Afghanistan, U.S. aid agencies use it so workers aren’t so vulnerable to robbery.



Security: The money gets where it’s supposed to go.



Financial inclusion: Electronic payment is a way for unbanked people to establish a record of on-time payment of their bills. This can be an “on-ramp” for them to get other services, such as loans, speakers said.



Cost savings: Moving physical cash around is costlier than zipping electrons. Many poor people, however, still find it cheaper to use cash, because some cashless networks charge high fees.



Access to new markets: This benefit is mainly for providers of financial services.



Kenya is a role model for the developing world when it comes to cashless payment. Its M-Pesa network, launched in 2007, has agents “on every block,” says Neal Keny-Guyer, chief executive of Mercy Corps, a nonprofit that’s a member of the alliance. Mauricio Cárdenas, Colombia’s minister of finance and public credit, said in an interview that he hopes within the year the national legislature will pass a law allowing nonbanks to take in cash and issue electronic vouchers.



The key is ensuring that the people who take in the cash are as well-supervised as bank tellers. “We see this as a first step,” Cárdenas said.































