There is a tendency to believe that the Covid-19 pandemic has accelerated a process that was already underway in many parts of the world: the transition to an economy that requires fewer and fewer cash transactions, a cashless economy. Although this is thought to have occurred primarily because of concerns with hygiene and biosecurity, there are many reasons why society is moving toward eliminating cash transactions. The main reason seems to be the practicality and convenience of both buyer and seller.
This document is the result of a research project of the Centro de Estudios de la Realidad Económica y Social (CERES) with the support of the Center for International Private Enterprise (CIPE). Within the framework of its project on “restarting” post-Covid economies, the objective of the project is to analyze the main challenges and opportunities of moving Bolivia towards an economy that does not depend on cash transactions in the form of coins, banknotes and paper checks. This could be achieved through the implementation of digital systems for common financial transactions and payment for goods and services.
There are many challenges currently identified for this transition to gain momentum in Bolivia, one of the main ones being that it is not yet clear whether such a transition is in the interest of the entire population, much less whether it is something we want to move towards in a planned manner. On the other hand, half of the Bolivian population currently does not even have a bank account. This paper seeks to look into the feasibility of implementing this type of transactions in Bolivia, identifying their acceptance by consumers and entrepreneurs, determining some impressions that the general population has about them, and considering the main obstacles in terms of institutional and technological infrastructure to identify how much progress should be made and in which elements.
In addition to the main idea stated above, the following two specific objectives are presented.
- What is the current state of the technological and institutional infrastructure available to make the transition to a cashless economy?
- To analyze the perception of the average Bolivian citizen with respect to the virtual payment facilities that exist in the country.