Understanding the 'Cost of Cash' for Low Income Clients: Why and How?

This note presents the development and implementation process of the 'Cost of Cash' tool (COC), a research tool which was designed specifically to understand the pain involved in cash transactions, and how mobile payments might address those challenges.

The note describes how mChek, the largest mobile payments provider in India, collaborated with MicroSave to explore the challenges that un/under-banked customers face with financial transactions involving cash, and how mobile payments might add value. Participants in the research scored financial transactions according to the level of pain in four categories namely, transaction costs, time spent, opportunity cost, and risk of holding cash. The note states that COC:

• Helps to determine what types of transactions incur the most pain for the customers while dealing in cash;
• Helps to listen to clients’ needs around the costs of cash and how mobile solutions may reduce those costs;
• Can help to discover which suite of transactions to focus on for electronic and mobile banking solutions;
• Helped mChek to refine its overall un/under-banked strategy and in developing new service offerings for its partners and end-clients.