Better Than Cash Alliance Webinar: Digital Food / Electronic Payments Pilot Study Presentation

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Information about Better Than Cash Alliance Webinar: Digital Food / Electronic Payments...
Finance

Published on March 21, 2014

Author: UNCDF

Source: slideshare.net

Description

E-Payments Deliver 15% Greater Efficiency in Kenya – Is This the Future of Food Aid?
The World Food Programme (WFP) transitioned from in-kind food aid to to electronic payments ("digital food"). In doing so they gained 15% cost efficiencies. This presentation made during a webinar presented by Better Than cash Alliance examines two food assistance projects in Kenya by WFP, and discusses how others can benefit from electronic payments.

E-Payments Deliver 15% Greater Cost Efficiency in Kenya Is This the Future of Food Aid? March 19, 2014

Dr. Ruth Goodwin- Groen Managing Director, Better Than Cash Alliance Introducing Our Speakers 2 Jamie Zimmerman Senior Associate, Bankable Frontier Associates, lead author of study Cheryl Harrison Head of Innovations, World Food Programme (WFP) Kenya Marc Van Puyvelde Contactless Payment Solutions, MasterCard Worldwide Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash

Session Agenda • Introduction to the Better Than Cash Alliance • Methodology • Key Findings • WFP “Cash for Assets” Journey • Lessons for Stakeholders • Next Steps • Q&A 3 Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash

Poll #1: Which category does your organization align with most? • Government • Private sector (financial service provider, MNO, etc.) • Development partners (UN, NGO, foundation, etc.) • Academic institution • Other 4 Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash

The Better Than Cash Alliance Governments, private sector and development organizations committed to a global movement from cash to electronic payments. • Advocates for organizations to commit to transition their distribution of government benefits, humanitarian aid assistance, payroll and supplier payments from cash to electronic • Provides the policy, technical and financial assistance needed to identify and implement the most effective approach for local market conditions • Develops cutting-edge research products, good practices and case studies in order to achieve scale globally 5 Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash

The case study is part of a cross- country comparative study of government-to-person (G2P) and donor-to-person (D2P) payments. Data was gathered in 2013 to understand how WFP moved from in-kind distribution to e- payments through interviews with: • WFP • National Drought Management Authority • Equity Bank in Kenya • Recipients Methodology 6 Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash

Key Findings 1. E-payments were 15% more cost efficient than in-kind distribution Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash 7

Key Findings 1. E-payments were 15% more cost efficient than in-kind distribution 2. E-payments scaled up from 5,000 to 81,000 households (i.e., 485,000 beneficiaries) during the 2011 drought Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash 8

Key Findings 1. E-payments were 15% more cost efficient than in-kind distribution 2. E-payments scaled up from 5,000 to 81,000 households (i.e., 485,000 beneficiaries) during the 2011 drought 3. Beneficiaries prefer e-payments over food aid and maintained the same food consumption levels Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash 9

Poll #2: In which phase of the shift to electronic payments is your organization? • Have not started (either in-kind or cash envelope) • Beginning to shift to e-payments • Increasing use of e-payments • Almost all payments are electronic • N/A Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash 10

WFP tested different delivery models, including mobile money and card-based payment systems: • Mobile money was faster to start up and can offer advantages for an emergency response, but • A debit card linked to bank account comes with more benefits for both donor and recipient and is the preferred model for longer- term resilience programs 11 Key Elements of the Pilot: Choosing an Effective Payment System Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash

• WFP overcame challenges with recipients’ lack of ID and tough registration conditions • WFP-trained staff used to delivering in-kind food aid to collect e-transfers data • WFP developed a secure centralized system to store beneficiaries’ personal data and manage transfers 12 Key Elements of the Pilot: Collecting and Managing Personal Data Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash

13 Results Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash • Stronger controls on aid delivery • Higher level of accountability among distribution partners • Economic empowerment of the beneficiaries • Increased financial inclusion for the “unbanked” • Growth of the local economy The shift to e-payments allowed the program to operate more efficiently and contributed to societal benefits:

Poll #3: What is the most important reason to shift to electronic payments for your organization? • Cost saving • Better security and increased transparency • Speed and scale • Beneficiaries’ economic empowerment • Stimulating local economies 14 Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash

Key Lessons for Stakeholders 1 Ensure a strong delivery value chain Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash15

Key Lessons for Stakeholders 1 Ensure a strong delivery value chain 2Invest in partnerships to amplify efficiency Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash16

Key Lessons for Stakeholders 1 Ensure a strong delivery value chain 3Ensure a predictable flow of funds before committing to scaling up a program 2Invest in partnerships to amplify efficiency Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash17

Key Lessons for Stakeholders 1 Ensure a strong delivery value chain 3Ensure a predictable flow of funds before committing to scaling up a program 2Invest in partnerships to amplify efficiency Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash 4Consider adjusting payment frequency for reduced cost and increased timeliness 18

5Create two-way communication channels with the beneficiaries Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash Key Lessons for Stakeholders 19

5 6Create two-way communication channels with the beneficiaries Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash Key Lessons for Stakeholders Test, learn, iterate 20

Objectives of the Merti pilot: • Examine if the model is technically achievable and commercially sustainable at scale in remote and economically marginalized areas • Identify its benefits for WFP, providers and recipients in terms of value, growth and costs Next Steps: Exploring an end-to-end electronic model 21 Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash

Next Steps: Results 22 Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash For Recipients • More convenient • Better security • More choices • Lower costs for withdrawal • Increased access to financial services For Merchants • New business opportunity • Reduced cash handling For WFP • Cost efficiencies • Increased transparency and accountability • Ability to scale and become sustainable in a commercial environment

Poll #4: What is the payment system your organization is using/considering? • Cash • Mobile money • Prepaid card without a bank account • Debit card with a bank account • Other, including voucher 23 Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash

Design a client-centric payment system Key Recommendations 24 Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash 1 Leverage transparent and regulated business models 2 Include financial inclusion in your design 3

Dr. Ruth Goodwin- Groen (Moderator) Managing Director, Better Than Cash Alliance Discussion Jamie Zimmerman Senior Associate, Bankable Frontier Associates, lead author of study Cheryl Harrison Head of Innovations, World Food Programme (WFP) Kenya Join the discussion on Twitter: Use #BTCAwebinar and @BetterThan_Cash Marc Van Puyvelde Contactless Payment Solutions, MasterCard Worldwide

Thank you info@betterthancash.org | @BetterThan_Cash

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