Study: Small retailers transact $19 trillion in cash annually

A new study from the World Bank Group and the World Economic Forum has given an estimate of the global value of micro, small and medium retailers’ transactions. The total value of these transactions is estimated at $34 trillion, of which $19 trillion is paper-based transactions. Global estimates were extrapolated based on key markets including Colombia ($145 billion), France ($950 billion), Kenya ($63 million), Lithuania ($8 billion), Morocco ($96 billion), Pakistan ($183 billion) and Turkey ($410 billion).

Findings from the study is expected to help companies, governments and nonprofits understand the barriers and incentives for people to pay electronically. Acceptance of electronic payments by micro, small and medium retailers is essential to expanding financial access.

A basic transaction account for payments and deposits is an entry point to the formal financial system and acts as a gateway for people to use other relevant financial services they need to smooth their consumption and manage income shocks. The case for payment services becomes increasingly compelling as individuals gradually move to a cashless economy, where electronic payments are widely accepted for regular and frequent purchases.

According to Gloria Grandolini, Senior Director, Finance & Markets, World Bank Group: “While many foundations and drivers exist for achieving financial access and inclusion, the potential impact of extending the use of digital financial services through a more widespread acceptance of electronic payments among small retailers is substantial.”

World Economic Forum’s Head of Banking and Capital Markets Matthew Blake was of the view that: “Moving away from cash toward electronic payments can have substantial socioeconomic benefits. Moreover, substantial business opportunities and avenues for public-private cooperation exist in better serving the micro, small and medium segment.”

The study, which is part of an ongoing collaboration between the Promoting Global Financial Inclusion initiative, World Economic Forum and the World Bank Group is supported by the Netherlands’ Ministry of Foreign Affairs, while the Bill and Melinda Gates Foundation provided through the World Bank Group’s Financial Inclusion Support Framework (FISF) program and the SME Finance Forum.