March, 2023

Responsible digital payments

Creating transformational change for tea communities through responsible digital payments
Economics Blog Rwanda

With ETP recently becoming a member of the United Nations based Better Than Cash Alliance, ETP’s Executive Director Jenny Costelloe and Regional Director (Africa) Liberal Seburikoko are interviewed about this new partnership.

1. Why is the Ethical Tea Partnership joining the Better Than Cash Alliance?

Jenny Costelloe: Our work at the Ethical Tea Partnership (ETP) is centered around improving the lives and livelihoods of tea workers and farmers so that we have a thriving tea industry that is socially just and environmentally sustainable. We work hand in hand with the private sector, governments, and civil society to overcome some of the complex issues farmers and tea workers face.

We are joining the United Nations-based Better Than Cash Alliance (the Alliance) because there is clear evidence that responsible digital payments help promote growth, boost productivity, and improve the livelihoods of smallholder farmers and tea estate employees in the supply chain. Moving away from cash helps advance the Sustainable Development Goals.

Our membership to the Alliance signifies a strong commitment to support ongoing digitisation initiatives in the tea sector, ensuring responsible practices are followed. Crucially, we’re prioritising that women, who make up most of the tea workers and farmers, can fully reap the benefits of digital financial inclusion.

2. How does this partnership fit into ETP’s Strategy2030 for a thriving tea industry that is socially just and environmentally sustainable?

Jenny: This partnership is aligned with the vision of Strategy2030. Our focus is working with companies to create transformational change for tea communities as we address the most pressing issues under three impact domains: economics, environment and equality.

One of the foundations of this strategy is a deep belief that sharing best practices and learnings is core to successfully deliver projects, business pilots and impact policy development within the countries. Through the research with the Alliance, ETP is well-positioned to disseminate knowledge on how digitising payments can benefit both companies and tea workers, but more importantly how to deliver this responsibly and at scale for the tea industry.

3. How do you see digital payments improving the lives of women in the tea sector?

Liberal Seburikoko: Women make up a large proportion of the workforce in many tea growing countries and wage payments are often made in cash.

Workers who receive cash payments are often part of the 1.7 billion excluded from the formal financial sector.

“Workers who receive cash payments are often part of the 1.7 billion excluded from the formal financial sector.”

In contributing to equality for all, our work encourages women to be more financially independent. Digital payments can help women exercise freedom in making financial decisions. Supported by a conducive ecosystem and appropriate financial education and digital literacy when needed, digital payments can drive long-term and sustainable change for women.

We look at the UN Principles for Responsible Digital Payments as a guideline to advocate for responsible practices in digitisation of payments within the tea sector. By prioritising women, we create a powerful ripple effect that catalyses upon their communities.

Access and ability to use affordable financial products and services can increase transparency and accountability. Beyond receiving their wages digitally, we would like to have tea workers and their wider communities use digital financial tools and services, so they are not exposed to the continual risks that come with ‘cash in hand’ payments. This is why promoting financial education and digital literacy can be very important to boost confidence and promotes economic stability. This in return will create better livelihoods for tea workers and their families.

4. Can you tell us about the work to digitise payments in the tea industry in Rwanda?

Liberal: ETP and the Alliance are supporting the Government of Rwanda’s goal to become a cashless economy by 2024. We are working closely with stakeholders in the Rwandan tea sector, including the tea communities, to better understand and support the acceleration from cash to responsible digital payments.

In supporting an economically thriving tea sector, we see digital payments benefiting farmers and tea companies with saving time and cost that accrue. For example, digital payments reduce farmers’ travel costs when collecting their payments.

“Enhancing responsible digitisation will lead to improved efficiency for businesses and enhanced livelihoods for all 60,000 tea farmers and workers in Rwanda.”

Building on existing initiatives to digitise various parts of the tea supply chain, our goal is to have an assessment of the digital payments landscape, leading to increased uptake of digital financial tools and services within the tea communities. We will work with all stakeholders in Rwanda to address the gaps that remain for scaling digital initiatives. Enhancing responsible digitisation will lead to improved efficiency for businesses and enhanced livelihoods for all 60,000 tea farmers and workers in Rwanda.

5. Where do you see impact of digital payments in your sector in the next 10 years?

Jenny: The ETP is dedicated to supporting our members enhance transparency and accountability across the tea supply chain. Responsible digital payments will be one way in which to achieve this, whilst at the same time, proactively safeguarding and enabling users to reap the benefits of digital financial inclusion.

In 10 years’ time, I believe that women tea workers and farmers will be seen as an important client base for financial service providers. This will result in more choice and interoperability of services in line with their needs.

I also believe that more secure and efficient transactions will result in increased incomes for the workers. Finally, supply chain actors which includes retailers, packers and producers, will have full visibility of the distribution of money through the value chain. This can drive more equitable practices and improve stakeholder relationships within the tea sector.