Report: Better Payment System Will Spur Digital Transactions in Women


By Emma Okonji

A recent report conducted by Caribou Digital, a research and delivery consultancy which was sponsored by Bill and Melinda Gates Foundation, has stated that better payment system can create a financial system that is more accessible as well as create conditions for more women to use the system.

This research explored the context of the Level One Project (L1P) Principles for payment system design put forward by the Bill and Melinda Gates Foundation, with the primary aim to examine the concept for their potential impact on the financial inclusion gender gap through in-depth research.

The research looked at why there are many women outside the formal financial system, despite the reduction of financial inclusion barriers, and what barriers exclude them in greater numbers than men. It based its studies on three complementary approaches: Qualitative focus group discussions and in- depth interviews with hundreds of women and men in Kenya and Côte d’Ivoire; Quantitative population-level data collection and analyses in five countries, Nigeria, Côte d’Ivoire, Bangladesh, Kenya, and South Africa; and Global literature review supplemented by a series of expert interviews.

“The aim is to predict the likely impact of L1P Principles on relevant gender gaps.
The research emphasises that women’s exclusion is driven by structural-cultural and socio-economic issues. Such issues include the fact that many societies invest less in building women’s knowledge and trust of financial products.

“Also, the fact that women are more often budget and time constrained than men and thus more sensitive to cost and time barriers, and they face more specific structural barriers, like owning lower-end phones or lacking necessary ID documents,” it added.

The report therefore concluded that better payment system design features and policies would help address such barriers.

Analysing the report, Caribou Data’s Co-founder, Bryan Pon, said: “Key areas where we believe L1P would be an improvement on the typical digital payments system and reduce the gender gap include: Interoperability, Low cost and pricing transparency; Tiered KYC; Low-end phones and Access points.”

According to the report, interoperability lowers barriers to entry and experimentation and also incentivises merchants to join the system en masse.

“This will be especially beneficial for women because it will lead to more convenience as well as new kinds of more specialised digital financial services (DFS) products that meet women’s specific needs,” it added.

The report further stated that while lower costs benefit everyone, women appeared to be more price sensitive, both in the focus groups and in other research studies.
The quantitative data also showed that women paid more in fees in Kenya, and hence would benefit from lower tariff rates.

The report also stated that population-level data from other research, as well as results from qualitative interviews, showed that women were much more likely to have limited forms of ID and thus will benefit significantly from the availability of accounts with lower KYC requirements.
In the area of low-end phones, the report stated that women were more likely to have feature phones or low-end Android devices and thus payment systems and financial services that don’t accommodate these users will disadvantage women disproportionately.

For access points, the report noted that focus groups in both Kenya and Côte d’Ivoire, showed that women often spoke about agents being their main point of contact for information and help in using financial products.

This principle is especially important in bank- based systems, where branches or ATMs are often scarcer than agents and are less welcoming places for women to find help than the neighborhood shop owners who are agents, the report said.

The report therefore recommended minor modifications to some of the principles to increase their impact in closing the gender gap, such as changes to principles that address irrevocability, account identifiers and directories, pricing transparency, user experience, and consumer education.

“Beyond these, we have also recommended better articulation and organisation of the principles, including enabling inexpensive user devices and notifications, and we are happy to see these suggestions have already been integrated into the official principles.

“In some cases, the principles may be sound but implementation by financial service providers needs to be guided so that users, especially women, are not left behind,” Pon said.