MasterCard convenes cashless conversation with government, academia and other NGOs
To tweet this news, copy and paste: NEWS: #MasterCard Progress Public-Private Dialogue on #CostofCash http://bit.ly/13Mh3Yn #CashlessConvo
Washington, D.C. – Jan.18, 2013 – As part of its ongoing effort to advance a public-private dialogue on the cost of cash and the benefits of electronic payments, MasterCard convened representatives from governments, academia and other NGOs to share insights and new research on this topic at a Public Sector Payments Forum here. Among the participants were World Bank, Universal Postal Union, The Fletcher School at Tufts University and the Southeastern Pennsylvania Transit Authority (SEPTA).
“Eighty-five percent of the world’s transactions are still being conducted in cash and checks,” said Ed Brandt, EVP, Managing Director, Government Services and Solutions at MasterCard. “Promoting a dialogue with governments, merchants and consumers is critical to creating greater shared value– greater efficiency, transparency and safety – as we move toward a world beyond cash.”
This public dialogue is gaining traction worldwide as the costs of cash become clearer:
- Last year, the U.S. budgeted $750 million dollars just to print and deliver money. It costs the US Treasury $1.03 to issue a federal benefits check, with electronic transfers costing 10 cents.
- Europe spends 60 billion-100 billion Euros per year just processing cash payments
- At least $8 trillion is spent in cash every year in black and informal economies globally – cash that is untaxed and untraceable.
- According to a forthcoming study by the Institute for Business in the Global Context (IBGC) at The Fletcher School at Tufts University, cash is a major vector for tax evasion in the U.S., likely costing the government more than $75 billion in missing tax revenue. The Fletcher School’s research also indicated that U.S. households invest $31 billion worth of time annually accessing cash, while businesses lose $40 billion worth of cash to theft, counterfeit and accident.
Governments in partnership with the private sector are spurring greater financial inclusion, improving access to the economic mainstream. This trend is evident especially in examples of how wages and benefits are being distributed:
- South Africa is delivering benefits to social grant recipients on debit cards and is on track to meet or exceed its target of 10 million citizens by this March.
- In the U.S., nearly 85 percent of all federal benefit payments are already electronic with a commitment by this March to increase that to 100 percent.
- The United Arab Emirates has mandated that all wages to laborers be paid electronically through the Wages Protection System (WPS) regulation enacted to ensure all laborers receive not just a portion of their pay but 100 percent of their pay.
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