We keep talking about cash as the problem when it is a symptom. There is a reason why value chains prefer cash to going cashless and that is the transaction cost of going cashless. A friend traded 1 Billion Naira of Airtime and decided to use the banks, he ended up with a 4 Million Naira loss because of charges. I actually simulated it and got the same results. He traded in cash and made a profit. That there is a no-brainer.
I have made suggestions on how best to go about changing this with alternate models in an earlier blog post titled “Cash to “Cashless” in Africa
An Alternative Mobile Payments Hypothesis” - https://medium.com/bigchiefs-thoughts/cash-to-cashless-in-africa-1a0920cdcd7b#.hu53yp8k8
In that post, I suggested a new hypothesis we can test based on my observations.
You can’t beat cash where it is strongest. It is a waste of time. You have to be like cash to beat cash. Nothing offers less friction and lower transaction cost at the transaction interface in Africa than cash.
People can do PhDs on this subject and nothing will happen unless we start testing out new models on the ground. Unfortunately, all the guys doing all the talking are not on the ground but in ivory towers like Tufts.