TOOLKITS Digital Financial Inclusion Toolkit
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Digital payments via neighborhood stores

What it does. The takeup of digital payment services are hindered by persisting digital divides. Even people who own computing devices and have access to the Internet are often reluctant to use them to make payment, as they do not feel confident enough and fear making mistakes, possibly paying more than they should. The Red Con Vos (“Network With You”) is a network of neighborhood stores, whose owners and managers own the necessary equipment for online payments and have been trained in how to help their fellow citizens complete different kinds of online administrative processes (not only payments). Residents gain the convenience of accessing digital payments; store owners charge a small fee for each transaction they facilitate, and, perhaps more importantly, benefit from residents visiting their stores more often.

Value proposition for the government/other partner. By capacitating proximity businesses to transmit online payments and conduct other online transactions, this intervention contributes to the accessibility of these services to the least digitally included citizens, including children, the elderly and those with care duties. Rural communities can also be included, as long as there is a local store with an Internet connection. Additionally, the businesses themselves stand to gain new customers. The programme is sustainable, as it is financed with the savings that result from citizens not having to travel to distant locations to use digital public services.

Why and when to use it. This tool is most useful when there is a digitized public administrative system with many administrative procedures that must be carried out online or in the central offices; when the access to both online and in-person procedures is problematic because of the lack of proper public transportation, high costs of public transportation, distance, and time restrictions —such as care or work responsibilities; and when there are community markets with computers or mobiles, and Internet connection.

Known issues and troubleshooting. Some stores might not have IT devices or a stable Internet connection in the community; some store owners might not being keen on joining the network. Providing devices to the stores, and approaching stores that might already have the required equipment, are among the solutions. It is also crucial to count on supportive local partners to provide assistance in establishing the network.

Context. In 2019, the UNDP Accelerator Lab in Argentina observed that a few owners of neighborhood stores had started offering, as an additional service to their clients, the opportunity to digitally complete some official bureaucratic procedures – including digital payments – in the stores. Many bureaucratic procedures have been digitalized in Argentina, but many residents do not feel comfortable with going through them without help. These residents fall back to travelling physically to the government office or bank, where they are facing long waits because, with digitalization, these organizations are divesting from public-facing physical facilities. This behavior was found to be more frequent in women, the elderly, and low-income households.

With the onset of the COVID-2019 pandemic, the demand for this service grew as mobility was reduced. The Lab is attempting to scale up this idea from individual initiatives to a service with good coverage of the population. A first pilot in Concepción del Uruguay, in a province called Entre Ríos, launched in 2021; a second one launched in Fray, in a different province called Catamarca, in 2022. The two municipalities have different geographic and demographic characteristics, making it possible to test the idea in different contexts. These two pilots show Red Con Vos to be financially sustainable, while saving travel time and distance for residents, supporting local commerce, and offering a partial solution to digital exclusion.

Cost. Between 10,000 and 60,000 USD depending on the size of the network and the resources locally available. The Concepción del Uruguay pilot cost 12,000 USD, with the local government overseeing the fieldwork to recruit the stores and invite them to join the network. It also took care of gathering the data to monitor and evaluate the initiative. The Fray pilot, as the local government did not provide any resources, cost 60,000 USD.

Time. 3 to 4 months. The first two months are for project planning, followed by a two-month on-site implementation phase. Once deployed, the network is designed to be self-sustaining. A longer time frame may allow for more evidence to assess the experience.

People. The project requires a project manager, a fieldwork manager, and a number of recruiters to recruit and train the the shopkeepers, and also to follow up the implementation of the project. Communication is crucial. Having a team of designers and someone in charge of producing a media kit and contacting the press is an asset. The many materials already designed and the guidelines are available for the fieldwork team.

Focal point. Lorena Moscovich.

Country, year, and language. Argentina, 2021 and 2022, Spanish and English.

Resources.

Information

Guidelines (in Spanish).

  • Guidelines for recruiters. Use this to explain to store owners what the implications of joining the network are. These can be used in most contexts after translation.
  • Guidelines for store owners. Use this to explain to store owners who have already joined the network how to supply this service, create trust, etc. These can be used in most contexts after translation.
  • Example procedures.This contains step-by-step procedures to execute digital payments and other digital bureaucratic procedures. These are written for the Argentinian digital landscape, and will need to be rebuilt for different contexts.