Is a Cashless Society Realistic? The Rural Challenge to the Post-Pandemic “New Normal”


By Aaron van Klyton and Juan Fernando Tavera-Mesías

Mobile banking and digital payments (“m-payments”) were already core features of government development policies aimed at beefing up digital infrastructure, increasing the visibility of the informal economy, and providing a low-cost way of bringing financial solutions to marginalised populations. International organisations also promoted m-payments to increase financial inclusion in bottom-of-the-pyramid markets around the world. From the private sector, banks developed innovative strategies and developed new digital products to reach a broader number of unbanked and under-banked consumers through smartphone applications (apps).

The COVID-19 pandemic accelerated digitalisation and digitisation globally. Furthermore, social distancing, remote working, and increased digital transactions imply that societies have become more reliant on non-physical forms of communications. During the pandemic, many Latin American governments used stimulus payments to mitigate the economic and financial effects of the lockdown. Vendors and consumers quickly abandoned paper money for fear of transmitting the virus and increasing the contagion rate. One year into the pandemic, a realisation emerged that the digital innovations implemented during the pandemic increased the efficiency of firms, particularly for the services sector. Many have predicted that such innovations will remain in place post-pandemic, forming part of what has been called the “new normal”.

The Colombian government, like other countries in Latin America, initiated measures to reduce the economic impact of social distancing for marginalised populations, including much-needed economic stimulus money. One condition for receiving this money was the possession of a regular savings account or a simplified account only accessed through mobile payment apps. Bottom-of-the-pyramid users prefer the latter because it is easier to open and has no account fees and minimal transaction fees. At the start of the pandemic, there were just over three million simplified accounts active in Colombia; four months later that number had increased to more than 5.4 million.

The COVID-19 pandemic accelerated digitalisation and digitisation globally. Furthermore, social distancing, remote working, and increased digital transactions imply that societies have become more reliant on non-physical forms of communications.

However, consumers in rural regions often lack high levels of technology awareness or experience in using financial products. These regions are characterised by inadequate digital infrastructure and irregular network connections. Although the pre-pandemic institutional efforts to enhance the use of m-payments received an abrupt boost, the question remains as to whether m-payments will be fully embraced by these users as an institutionalised practice in the longer term.

Despite overwhelming support for digital solutions to the problem of widespread financial exclusion, we found that active and passive forms of resistance to mobile banking have emerged in recent market interventions in rural Colombia which call into question the effectiveness of existing strategies regarding the usage of m-payments. We hope to draw out critical lessons from these studies in order to better understand the sustained post-pandemic use of m-payments.

In our work, we examined the implementation and acceptance of two different mobile banking apps through a series of interviews in two rural towns in the Department of Antioquia, Colombia. The first town1 experienced a fully private sector initiative to develop and implement an app to close the paper-money cycle completely. In the second town2, a digital payment system was implemented as part of a contract with the government to deliver a subsidy to low-income, vulnerable women. In each case, the banks engaged collaboratively with the town concerned and with national and local government authorities and other stakeholders to create “cashless societies”. However, these short-term experiments did not yield the expected results (that is, a successful and sustained use of m-payments) due to a number of factors. These included 1) the importance of cash as both a core component of the informal economy and a cultural symbol; 2) the installation of an automatic teller machine (ATM), thwarting the bank’s own efforts to fully remove cash from the ecosystem; 3) rural gender relations; and 4) the banks’ premature withdrawal from the towns. What resulted was a tension between the market and government objectives and the social and cultural structures of the towns.


1. The importance of cash

Prior to the pandemic, rural communities in developing countries used cash to organise social life. For the towns studied in this report, it was customary to have a weekly Día del Pueblo (Village Day), where local residents and people from the surrounding areas would come to the town plaza to buy and sell items, socialise, and catch up. This was typically the day that bosses doled out stacks of Colombian pesos to workers for their weekly labour. These processes and rituals made sense to locals and were embedded in the towns’ traditions and dovetailed with the informal economy in rural life, where workers were paid in cash on an ad hoc basis for odd jobs and short-term “contracts”.

2. The “wrong” technology comes  to town

In the first town, locals were able to purchase almost anything using digital money at a significant proportion of local businesses (supermarkets, hotels, restaurants, and farming supply shops). The bank also hired a local agent to visit the outskirts of the town (las veredas) on motorbike to answer questions about the service, accept cash deposits – which were then credited to users’ app accounts – and to give cash withdrawals from a miniature safe attached to the bike, acting as a “travelling teller”. Furthermore, cash withdrawals could also be performed through corresponsales bancarios, micro-bank branches housed in local shops. However, such actions undermined trust in the digital ecosystem and, in fact, reinforced the significance and use of cash in the town.

In the second town, the bank installed an ATM at the request of the mayor, who no doubt perceived it as a sign of local development. However, despite providing a resource for consumer freedom for some, the strategy reintroduced cash in the town, reinforcing its meaningfulness and working against the advances of the digital solution. While the contract with the government facilitated an important and difficult task – depositing digital money in the app – the ATM was an ever-present invitation to withdraw cash, reversing any progress achieved in creating a cashless society. In short, these actions contributed to “value co-destruction” for the innovation, rather than value co-creation. 

3. La mamá es la jefa del hogar – a question of gender?

In Antioquia, there is the well-known expression, “La mamá es la jefa del hogar” (the mother is the boss in the home), which means that running the household, including the savings and budgeting, is largely within her domain. And, in fact, we found that the women in the town were more open to using the app than the men in their initial evaluation of the service and subsequent use, such as digitising the community savings circle managed by the local women (las natilleras). Accordingly, the banks included women in their training strategies. In the end, however, the women were often negatively influenced by their husbands’ resistance to it, undermining the adoption of the technology.

4. The banks’ premature “pull-out”

Both banks came to the towns in full force, hosting activities such as education programmes, sponsoring festivals, and running workshops to train the merchants and the corresponsales on how to use the app to make transactions. The banks’ involvement was necessary to allay the (irrational) fears of some locals, such as the belief that the money was actually in the mobile, meaning that losing the mobile would translate to losing the money.


In both towns, after the pilot period, residents manifested lukewarm enthusiasm for using digital money. In the second town, the bank lost the government contract to deliver the subsidy, which inadvertently increased the difficulty of institutionalising a digital ecosystem for mobile payment. The bank was then compelled to convince people to withdraw the subsidy from an “app-less” new bank and deposit it into the app’s account – an additional effort for users. The loss of the contract also reduced the bank’s available resources to support its activities in the town and service the community. The bank’s subsequent departure from the town destabilised the emergent digital payment ecosystem and increased the perception of risk and uncertainty for local app users. Therefore, instead of the early users constituting a sufficient catalyst for institutionalising digital money practices, the old cash-based traditions resumed. Our findings showed that the change of the dominant form of currency to digital money required significant adjustments for rural communities due to the tangible symbolism and cultural significance of cash. While the banks tried to shorten the learning curve and reduce frictions associated with the institutionalisation of digital money, little progress was made. From these examples, a question arises with regard to the sustainability of m-payments in rural communities, particularly as the clutches of the pandemic lift, government stimulus payments dry up and people are free to interact face-to-face again: to what extent will m-payments remain a dominant currency for rural communities, or will the residents “bounce back” to cash-based traditions? In view of this, we offer some recommendations on the development and marketing of m-payment applications for these vulnerable consumers.

Implications for business practice

An ecosystemic approach implies that banks conceptualise user experiences beyond one-to-one interactions (that is, user-app or user-merchant) and integrate a broader range of actors in detailed strategies.

First, we suggest that banks take an ecosystemic approach to ensure that their m-payment strategy is sustainable in rural markets. This requires a commitment from specific actors to integrate resources and develop long-term relationships to prevent these consumers from bouncing back to cash-based traditions. An ecosystemic approach implies that banks conceptualise user experiences beyond one-to-one interactions (that is, user-app or user-merchant) and integrate a broader range of actors in detailed strategies. For example, local and national government actors, technology suppliers, merchants, and education institutions should be the first line of coordination to ensure that users remain loyal to m-payment apps through practice, policy, and communications. Furthermore, m-payments can be used to support extended social distancing measures until the long tail of this virus concludes, thus embedding these practices pre-emptively with respect to future pandemics. The potential value of the ecosystem could be maximised if banks consider the experience and design of service for each of the aforementioned actors, “guaranteeing” that all of them can pursue their social and economic interests. In other words, simply planning for the user experience will no longer be sufficient for the institutionalisation of m-payments.

Gender in rural communities (let the women lead the way!)

As alluded to above, our findings show that women could be effective agents of change for the institutionalisation of mobile banking in rural communities. Women are the central pillar of these tight-knit collectivist communities; they manage the savings and run the household. They constitute a critical aspect of rural ecosystems and can affect the outcome of innovation processes. Therefore, mainstreaming the gender perspective matters and implies that banks should give greater consideration to the role that women play in financial management for product design, implementation, and marketing strategies for rural communities. This requires identifying the traditional roles that women maintain in rural households and designing communications and user experiences in terms of their needs and preferences. Furthermore, integrating the women’s traditional managerial roles into an m-payments app design, along with financial education and training, could serve to empower them as social entrepreneurs.

women in business

Why should the rural question matter to practitioner audiences?

Our findings emphasise the importance of taking into consideration the context of rural life when developing a value proposition for mobile banking and digital payments, otherwise businesses and banks might not fully “cash in” on the benefits of a new digital normal. We found that while rural communities were not inherently opposed to m-payments, additional support structures were needed to build confidence in the innovation and embed it into everyday practice.

Bank managers should also bear in mind that technology- enabled consumption represents a magical proposition for rural communities, often far removed from the penetration of high technology. As such, they can live between two worlds – the traditional and the digital – which has implications for successfully implementing digital innovations in a service ecosystem.

Our findings emphasise the importance of taking into consideration the context of rural life when developing a value proposition for mobile banking and digital payments, otherwise businesses and banks might not fully “cash in” on the benefits of a new digital normal.

The challenge remains for banks to develop strategies that keep customers drawn towards m-payment use, even during non-consumption moments, to counteract the bounce-back effect. In this regard, we recommend that marketing communications evolve from simple banners and the like to a more discursive tactic, supporting social distance practices and reinforcing a sense of pride that rewards mobile banking use. In practice, this could entail integrating other financial services into the digital sphere, such as microcredit lending. To this point, financially marginalised people in rural communities often turn to informal lenders who charge high interest rates and stipulate weekly payments for short-term assistance (pagadiaros). The app could offer microloans using digital money, which would extend the value proposition beyond the basic mobile payment transactions of the original app design. This would have a secondary positive effect on economic inclusion when combined with micro-entrepreneurial training and financial education.

Moreover, banks could adopt a management philosophy that reflects an understanding of value as a co-created process between multiple actors of an ecosystem, rather than as a product developed by the bank and delivered to the customer. This approach would enhance the value proposition, because it takes into consideration the “jobs, pains, and gains” (Osterwalder et al., 2014) of mobile banking usage and mitigates the potential perception of a brand imposing its product on the rural market in a top-down manner. In addition to the government welfare subsidy, small earnings from the informal labour market could also have been facilitated through the app, had it been acknowledged and included within targeted marketing strategies. In the new norm of “cashlessness”, salaries could be transferred digitally to employees in rural areas, and mobile banking applications would ensure that a good proportion of money circulates through the economy without rematerialising as cash.

In sum, we argue for an overarching, inclusive strategy where different actors (national government, regional government, local government, vendors, families, and tourists) are involved and “reside” within the digital sphere. This would foster a favourable institutional context for replicating m-payment practices, offering greater value.

About the Authors

Aaron van Klyton

Aaron van Klyton (PhD, King’s College London) is assistant professor of international business at Ramapo College of New Jersey and visiting professor on the PhD Business Management Programme at the University of San Buenaventura-Cali, Colombia. He conducts research on mobile banking, SME finance and green innovation, and innovation resistance.

Juan Fernando Tavera-Mesías

Juan Fernando Tavera-Mesías is a professor and consultant of marketing at University of Antioquia. He conducts research on mobile banking, technology acceptance and service ecosystems. His work has been published in Journal of Rural Studies, Information Technology and People, and Journal of Service Management, among others.


  • van Klyton, A., Tavera-Mesias, J.-F. and Castaño-Muñoz, W. (2021), “Innovation resistance and mobile banking in rural Colombia”, Journal of Rural Studies, Volume 81,  2021, pp. 269-280,
    ISSN 0743-0167,
  • van Klyton, A., Tavera-Mesias, J.-F. and Castaño-Muñoz, W. (2021), “Value co-creation and co-destruction in the first cashless society in Colombia – a middle range theory approach”, Information Technology & People, ahead of print,


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