The world is moving to digital payments because they are swifter, safer, and more transparent than cash. As we rush to reap the benefits of digital payments, responsibility of design, safeguards and implementation must not be overlooked. By digitizing payments responsibly, we can swiftly reach financial equality and advance the Sustainable Development Goals.

2021 EDITION

A lot has changed since the United Nations-based Better Than Cash Alliance charted a fairer and quicker route to financial equality - in 2016. Technology advancements are remaking economies, societies and transforming the digital payments landscape. New financial services have proliferated.

Then the COVID-19 pandemic hit, the world was altered, and digital transactions from governments to citizens nearly tripled.

To respond to the urgent need for digital payments and prepare for the next pandemic or natural disaster, the United Nations Principles Responsible Digital Payments focus on the following:

  • Prioritization of women as a key cornerstone for sustained development
  • New technologies are developed and delivered responsibly
  • A stronger user lens scrutinises all aspects of digital payments, and
  • Recommendations to deliver positive lasting change

These Principles define who needs to be responsible, what it means to be responsible and how to be responsible. They are not intended to provide a technical analysis of what each Principle, such as transparency, means in practice.

The UN Principles for Responsible Digital Payments 1 were developed by the United Nations-based Better Than Cash Alliance, guided by its member governments, companies and international organizations. The Secretariat Team would like to thank their members for their bold leadership in responsible payment digitization practices and their insightful contributions to these Principles. This flagship resource responds to the UN Secretary General’s Roadmap for Digital Cooperation.

Download the Principles

The PRINCIPLES

Treating people with fairness is the foundational principle. Yet many users are still being treated unfairly. This must alter. Why?

Because the next billion users of digital payments will encompass the currently underserved. These users face higher barriers to adoption and suffer more keenly if funds go astray. Inequality persists between the treatment of affluent and underserved users.

To attract sceptical users and build trust, fairness must be systemic.

The speed of growth of digital payments exerts pressure on systems, supply chains and software.

According to GSMA, 1.2 billion new users have been added between 2017-2020 and the curve is steepening.

Under this onslaught fault lines have widened.

Digital payments need to work every time. All users rightly expect their funds to be safe and readily available. Today, too often, this is not the case.

To unleash the full potential of digital payments for women, the industry must overhaul its approach. Half the world suffers from systemic biases that hinder adoption of digital payments.

Service design, AI algorithms, organizational structures and incentives all need to be re-imagined to ensure women’s equality.

Governments and the private sector are increasingly aware of the transformative power of female enfranchisement. Recent female-focused welfare transfers during the COVID-19 crisis underline this.

The Better Than Cash Alliance believes prioritization of women is now crucial to the realization of financial equity. Therefore, the need to prioritize women is the newest principle.

Preventing the misuse of data is fundamental to developing trusted digital payments.

Today, data is being generated in unprecedented volumes which increases risk of misuse. This is spurring conversations surrounding data ownership, consent, and bias.

Most current data protection and privacy models anchor on consent. However, users frequently do not understand what they are agreeing to, rendering consent meaningless. Replacing today’s flawed model with user control and accountable data stewardship will build trust.

The concept of ‘drifting consent’ and how it can be rectified by regulation, business processes, advocacy and policymaking is scrutinised here.

Billions of people remain excluded from digital payments.

Providers typically design for the savvy user, neglecting the diversity of need among the underserved.

Consequently, financial inclusion is no longer simply an issue of access. It is a question of delivering relevant, quality product choices to individual adopters.

Advancements in data analytics are helping to shape a future where user experiences are personalized irrespective of wallet depth. As digital payments proliferate, user-centric design is a critical determinant of success.

Rapid uptake of digital payments means new users are meeting old transparency ideas. These customers often find terminology surrounding digital finance opaque and confusing. This lack of understanding fosters distrust.

They are not alone. Even more knowledgeable consumers prefer not to read the small print.

Yet disclosure itself is not the only magic bullet.

Complexity in the ecosystem will only grow, granting members an opportunity to embrace a culture of transparency that empowers users. The time of paying lip service to redundant compliance terms has passed.

The full benefits of digital inclusion will only be unlocked when services are truly interoperable. Yet still, many users languish in silos preventing transaction. These silos stop digital payments from achieving more convenience, affordability and utility than cash.

Progress towards a more interconnected network of digital payments solutions has been steady. It needs to accelerate. The next leap forward hinges upon how swiftly governments, companies, international development organizations and providers explore the benefits of ecosystems founded upon open infrastructure.

Policy mechanisms, standards and incentives can unlock interoperability.

More users equal more cases of grievance. Redress is vital to the next billion adopters who are disproportionately impacted by loss of funds.

Today, too often, recourse systems are archaic and inadequate.

Recourse is sometimes an awkward topic to address. Yet updating recourse platforms benefits the provider and the user. Data generated by redress procedures is immensely powerful and can improve systems, processes and products.

It is now time to put recourse under the spotlight.

User trust presupposes a responsible ecosystem. To date, this has not been achieved.

Compliance has required accountability to rest with providers. However, users have remained confused and struggle to identify who is responsible for detecting or addressing problems. To realize a world where digital payments exceed cash, reliance upon statutory provision is insufficient.

Accountability and responsibility are evolving to become shared along the value chain. Building towards this new normal will result in stronger user trust, better value propositions and increased usage of digital payments.

Digital payments are safer, more affordable and more efficient than cash. Digital financial equity boosts women’s’ participation in the economy and accelerates attainment of the Sustainable Development Goals.

The challenge for digital payments is to be better than cash in all aspects. If they fall short, a billion new users become a billion reversions to cash.

IN PRACTICE

Treat users fairly

Colombia

Colombia’s G2P cash transfer programme in response to COVID-19

Colombia’s government launched Ingreso Solidario to provide relief to households both impacted by COVID-19 and excluded from existing Government-to-People (G2P) payment schemes. By tailoring product and outreach to beneficiary needs, Colombia excelled at treating clients fairly. For example, financial service providers were urged to make apps available for both feature phones and smartphones to ensure access for low-income segments.

The initiative successfully transfers US$42 monthly to 3 million previously excluded households—60 percent of which were headed by women. Nearly two thirds of the recipients made digital transactions with the funds, and 42 percent deposited additional cash into their digital wallets.

Ensure funds are protected and accessible

Mexico

A mobile payments gateway enabling instant, secure settlements

Cobro Digital (CoDi) mounts secure payment request functionality onto Mexico’s existing Faster Payments System (SPEI) via a user-friendly mobile front-end. This innovative solution has resulted in a mobile payment gateway that provides instant, secure settlements. It also gives users the option to add secure access using biometric and face scan technology.

The platform uses quick response (QR) and near-field communication (NFC) technologies to connect trusted users to each other and facilitates secure, instant and free transfers

Prioritize women

Bangladesh

The Amader Kotha is a helpline for garment workers around digital wage payments

Supported by Gap Inc., Amader Kotha is a helpline for garment workers’ digital wage payments in Bangladesh.

Amader Kotha was established in 2014 as a national helpline to help garment workers (85 percent of whom are women) report and resolve wage, safety and other concerns. To date, it has served 1.5 million workers.

In 2020, the government mandated digital payments in response to the COVID-19 lockdown and chose to partner with this helpline to address issues of recourse and to expand the helpline’s functionality and scope. It prioritized women by collecting data on multiple gender-disaggregated metrics, including the percentage of women comfortable with digital payments and their preferred mode of recourse, as well as largely staffing the helpline with women officers to increase comfort among women callers.

Safeguard client data

Ghana

A multi-stakeholder body guiding Ghana’s data protection journey

The Data Protection Commission (DPC) is responsible for regulating how organizations gather and process user data while articulating the business case for data stewardship. Any entity that handles personal data must register with the Commission in advance, clearly demonstrating legitimate grounds for use.

Today, the Commission has registered and monitors roughly 700 entities across Ghana, including businesses and government agencies.

The Commission plays a leading role in shaping policy in Africa and supports countries in the early stages of data stewardship, including Ethiopia, Gambia and Namibia.

Design for individuals

Rwanda

Long-term retirement savings scheme by the Government of Rwanda

In 2017, Rwanda established its long-term savings scheme, EjoHeza, to extend the protection of post-retirement pension benefits to all Rwandans, regardless of the nature of their livelihoods. The customer-centric programme enables non-salaried workers to contribute digitally to a national ID-linked pension account. It leveraged behavioural research to understand users’ needs and attitudes towards savings to inform product design and ensure simple onboarding processes for account opening. In a year and a half, more than half a million Rwandans (10 percent of all informal workers) opened digital accounts.

Be transparent, particularly on pricing

Senegal

Integrated Management Information System for Universal Health Coverage

The Integrated Management Information System digitized and simplified enrolment and payment for the existing health insurance scheme to streamline payments between the agency, other health providers and employees. The system promotes transparency, as it enables beneficiaries to view and manage their insurance plans via a mobile app providing personalized information and account history. It also informs beneficiaries about data collection and allows users to control, modify and communicate with administrators about their data.

Within 10 months of digitization, the scheme onboarded 54,000 users and reduced enrolment costs per user from US$4.70 to US$2.40. Today, 2.8 million people are enrolled.

Provide user choice through interoperability

India

The gateway at the centre of India’s open and inclusive digital payments ecosystem

Envisioned by India’s government, the Unified Payments Interface (UPI) is the gateway to India’s open and inclusive digital payments ecosystem. It combines an information exchange protocol with a white label front-end. The interface enables seamless transfer of funds across payment service providers, with the aim of providing a fully interoperable experience in the future.

The design and supporting policies were conceived with the wider payments ecosystem, including consultations with leading banks and fintech.

Make recourse clear, quick and responsive

Afghanistan

Hotline for humanitarian cash transfers and other programmes

Awaaz, a toll-free, countrywide hotline for refugees, internally displaced people and returnees, has applied good recourse practices to improve humanitarian transfers.

Its success is a result of its full-circle communication and practice of sharing user needs with humanitarian partners to improve programming.

Awaaz is open every day, with around 50 percent women operators to improve comfort for women given social norms, and more than 40 percent of users reported that communication channels with service providers were working well.

Champion value chain accountability

Collaborations with mobile network operators

In 2015, the International Rescue Committee (IRC) committed to providing 25 percent of material assistance in cash by 2020 and to using more digital payments. Four years later, it has successfully increased payment volumes by almost 15 percent.

This was achieved by forging strategic partnerships with mobile network operators to provide cash assistance. IRC has shared responsibility with partners through technical requirements covered in contracts. It has also included requirements such as the blocking of lost/stolen SIM cards and ensuring providers have data protection policies in place, and has played a key role in solving common issues.

UN LEADERS

Leaders from the United Nations add their voices in support of the UN Principles for Responsible Digital Payments:
The UN Principles for Responsible Digital Payments offer a powerful tool to drive digital payments emphasizing trust, transparency, and equity. This update is timely given fast moving technological developments which require greater attention on data protection and designing for user needs and capabilities. Applying these principles will help ensure digital payments can be used in a safe and user-friendly manner that supports improved development outcomes, particularly for vulnerable women who have been disproportionately affected by the COVID-19 pandemic.”
H.M. Queen Máxima of the Netherlands
UN Secretary-General’s Special Advocate for Inclusive Finance for Development
Digital finance is on the march, and the COVID-19 pandemic has now accelerated the move from ‘physical’ to ‘virtual’ banking. As the world moves from cash to digital payments, all stakeholders must support responsible practices to help build a digital future that treats everyone fairly – especially women – while driving down poverty and spurring inclusive economic growth.”
Achim Steiner
Administrator
United Nations Development Programme (UNDP)
Digital payments, when provided responsibly, have the potential to promote decent work by enabling millions of female and male workers around the world to have better control over their wages and benefits.”
Guy Ryder
Director-General
International Labour Organization (ILO)
Fulfilling the objective of bridging the last mile, responsible digital payments enhance the inclusion of vulnerable farmers, fishers and pastoralists living in remote areas.”
Qu Dongyu
Director-General
Food and Agriculture Organization (FAO)
I am pleased to voice my support for this publication in the firm belief that digital financial services can change millions of people’s lives for the better, but only if they meaningfully address our needs and prove deserving of our trust.”
Houlin Zhao
Secretary-General
International Telecommunication Union (ITU)
Humanitarian cash assistance is a lifeline for millions of refugees and other people who have been forced to flee their homes. It provides them not only with the help they need, but also the hope, and is done so in a dignified way. As the UN protection lead, we are fully committed to UN Principles for Responsible Digital Payments which also upholds equal opportunities for women and men irrespective of religion and ethnicity, and ensures the safeguarding of data.”
Filippo Grandi
United Nations High Commissioner for Refugees (UNHCR)
Shifting from cash to digital payments is critical to building the foundation for future investments in the world’s poorest countries. There is only one way to go about this transition: ensuring payments are made responsibly and responsively to people’s needs.”
Preeti Sinha
Executive Secretary
United Nations Capital Development Fund (UNCDF)
Safeguarding the data of people in need of food assistance is fundamental to their protection, as data breaches can have dire consequences. The UN Principles for Responsible Digital Payments reiterate the importance of ensuring sound data protection and privacy safeguards and calls upon all humanitarian actors to deliver on these protective measures. This is part and parcel of our duty of care, and promotes greater trust between us and the people we serve.”
Valerie Guarnieri
Assistant Executive Director
World Food Programme (WFP)

1 The name does not mean all UN member states endorsed or committed to follow this set of principles, which are for guidance purposes only. This resource was developed by the United Nations-based Better Than Cash Alliance, responding to the UN Secretary General’s Roadmap for Digital Cooperation, and UN leaders added their voices in support of these responsible practices for payment digitization.