As the coffee industry increasingly explores digital payments, it is essential to consider the experiences of coffee farmers and how this shift towards digitization affects their lives and livelihoods, taking into account the context of each country. By highlighting the voices of farmers, we aim to help stakeholders in the coffee value chain better understand whether and how digital payments can support their goals. Our objective is to eventually encourage active participation in responsible digital payment practices throughout their supply chain.
Caravela Coffee, a specialty coffee exporter in Colombia, connects small-scale farmers with global markets through a focus on quality, transparency, and sustainability. Caravela supports farmers by paying them directly through bank transfers. 60 Decibels conducted phone surveys with 279 coffee growers. The farmers were selected from a contact base of 1,003 farmers who had been paid by Caravela in the most recent season using a random sampling approach.
A typical farmer has been receiving bank payments from Caravela for 2 years, primarily through Banco Agrario or Banco de Bogota. 73% report actively using their bank account in the last 30 days, mainly to receive payments and withdraw cash. The rise of digital wallet apps in Colombia, such as Nequi or Daviplata, has also facilitated regular transactions for users, with a quarter reporting active use of digital wallet apps. More than half do not use any financial tools other than their bank account.
A typical farmer receives payments from Caravela in their account after 7 days of selling their coffee but expects it to arrive in 3 days time. Despite this, 75% of farmers rate the payment timeliness positively; highlighting the role of proactive expectation setting with farmers on payment timelines. Those rating the payment timeliness as is ‘very good’ typically receive their payment on their expected day without delays. 7 in 10 farmers say that they are ‘very likely’ to continue selling to Caravela based on their most recent payment experience. Besides timely payments, satisfaction is driven by the good price offered for their beans.
3 in 5 farmers prefer receiving payments via bank transfers, primarily due to the security of the transactions. However, 27% still prefer cash in order to immediately access the entire payment and the time savings incurred by skipping the withdrawal process. Deductions incurred during withdrawal (such as government taxes) may influence farmers’ preferences for cash.
In the most recent season, 3 in 4 sold their coffee to alternative buyers. 61% of farmers were paid in cash by their alternate buyer and resultantly, nearly all say payments from alternates were received within a day or at the point of sale. Half of the farmers rate the alternate buyer to be better than Caravela, owing to the speed of payments. However, the other half values Caravela’s good price which offsets their perception of the time taken to receive bank payments.
Although only 11% of farmers report challenges with their payment experience with Caravela, farmers’ top suggestions for improvement focus on faster payments and receiving notifications about the payment status from Caravela. 8 in 10 farmers either received a custom SMS from Caravela or a bank notification, but 20% were not informed about their deposit status, indicating room for strengthening communication channels in the future.
