Key steps for Trinidad and Tobago to reduce its cash dependency

In our previous article, we explored why countries worldwide are reducing their reliance on cash and how TT could benefit by following suit. We examined examples from Norway, China, and Thailand, where significant progress has been made in building cashless economies.

The journey toward reducing cash use in TT will require effort, co-ordination, and public awareness, as it isn't merely about adopting digital payments but fostering trust in digital solutions and modernising infrastructure.

While TT has a long road ahead, there are actionable steps the country can take to start shifting away from cash dependency. Here are five essential steps to help build a foundation for a more cash-optional society.

1. Develop digital infrastructure

The first crucial step is strengthening TT's digital infrastructure. While mobile payment platforms and online banking options exist, reliable internet access and secure, accessible digital solutions remain inconsistent.

Our mobile phone penetration is very high; the report from Data Reportal puts TT at a 122 per cent mobile penetration rate for 2024.

Right now, we don’t have many digital wallet solutions that people are excited to use. This is where the fintech solutions can bring some real innovation and hopefully, more progressive companies can get the new e-money licences and create solutions that generate meaningful excitement.

Additionally, investing in cyber security measures, fraud prevention, and data privacy protocols will foster trust and make digital transactions more attractive to the public.

2. Incentivise digital payments

For any society to reduce cash usage, incentives play a crucial role. TT could encourage businesses to adopt digital payment options by offering tax breaks or other benefits.

Lowering transaction fees for digital payments, particularly for small businesses, could also make digital transactions more appealing.

Governments in other countries have also encouraged consumer adoption through incentives such as cashback programs, discounts, or reward points for digital payments. By creating similar incentives, TT could drive both businesses and consumers toward digital transactions, gradually reducing cash reliance. Here in Thailand, apps like GoWabi for services, and Hungry Hub to book your tables in restaurants, offer discounts and exclusive deals that can only be had through the apps, which push you to always look in the apps first for deals before anywhere else.

3. Build trust in financial institutions

One of the primary barriers to digital adoption in TT is a lack of trust in financial institutions fuelled by fears about security, privacy and government intervention. To address this, banks and government bodies must improve transparency and build stronger relationships with the public.

Clear communication about the benefits of digital payments and consistent education campaigns can ease fears. Banks can also enhance customer service, ensuring any issues related to digital transactions are handled promptly and professionally.

Establishing a trustworthy environment for digital payments will require long-term commitment, but it is a critical component in the journey to a cash-optional society. In TT, we know we have a
long road ahead in this area.

4. Promote financial literacy

A significant part of transitioning to a digital economy is ensuring the population understands how digital payments work and feels confident using them. Financial literacy campaigns should target all age groups and communities, focusing on using digital-payment tools safely, how digital transactions benefit individuals and the economy, and how to avoid fraud or scams.

Public education campaigns, digital literacy workshops, and school programmes can help citizens of all ages understand and feel comfortable with digital payment systems. For many citizens, particularly older populations and those in rural areas, education will be essential in shifting away from cash.

5. Create a balanced approach

The goal is not to eliminate cash entirely but to minimise its use, aiming for a scenario where fewer than 20 per cent of transactions are cash-based. While digital payments should become the preferred method, cash will remain an option for those who need it. Creating a balanced approach that respects both preferences will ensure a smoother transition.

Learning from Thailand's approach, TT could establish a hybrid model, ensuring digital options are accessible while allowing cash for those who may not feel comfortable with digital payments or lack the necessary technology.

By striking this balance, the country can ease into a more digital economy without alienating any segment of the population.

Moving forward

Reducing cash dependency in TT will require investments in infrastructure, incentives for businesses and consumers, and a sustained effort to build trust and educate the public.

While the path to a more cash-optional economy may be challenging, the benefits of increased efficiency, security, and financial inclusion are well worth the journey.

By taking these steps, TT can begin to move closer to a balanced, digitally integrated society that reaps the rewards of a cashless future without completely abandoning the option of physical cash.