Digital Social Payments and
Financial Inclusion
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Silvia Baur
29 April 2016
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Cash transfers proved to
• have transformative potential for local communities
• strengthen local markets
• are a more dignified way of providing assistance across sectors
• are more cost-efficient and transparent for governments
Expansion of access to digital financial services
Build long-term resilience and minimize vulnerability
Build the bridge from transfers to sustainable
development
4Source: The World Bank F&M GP
Build the bridge from transfers to sustainable
development
Digital social payment programs – Case studies
5
The Pantawid Pamilyang
Pilipino Program (4Ps)
The Ti Manman Cheri
(TMC) Program, Haiti
Digital social payment programs – Case studies
6Sources: CGAP 2014; Findex 2014; Corruption Perception Index
country rank is out of 174 countries (Transparency International 2012)
The PhilippinesHaiti
Account at a financial institution (% age 15+) 17.5 28.1
Mobile account (% age 15+) 3.8 4.2
Used an account to receive G2P transfers
(% age 15+)3.5 4.0
Used an account to receive G2P transfers
(% poorest; age 15+)2.8 3.0
Bank branches/100,000 people 2.7 8.1
ATMs/100,000 people -- 17.7
SIM penetration (%) 61 106
Corruption Perception Index (country rank) 165 105
Digital social payment programs – Case studies
7Sources: CGAP 2014
Administered/
managed by
Social and Economic
Assistance Fund (Gov)
Department for Social Welfare
and Development (Gov)
Funded by DonorsGovernment and donors
(WBG, ADB, AusAid)
Target recipients Mothers of school children Poor HH with children
Year started 2012 2007
Conditionality Yes: school enrollmentYes: school enrollment and
health care
Number of
recipients80,234 (2015) 3,967,517 (2013)
Delivery method Mobile money and cash Cash card and cash
The Pantawid Pamilyang
Pilipino Program (4Ps)
The Ti Manman Cheri
(TMC) Program, Haiti
Digital social payment programs – Case studies
8Sources: CGAP 2014
Average grant per recipient USD 15.00 USD 63.01
Payment frequency Bimonthly Bimonthly
Weighted average fee per
payment (all methods)USD 1.36 USD 0.75
As % of average grant
(all methods)9.1% 1.2%
Cost by type of payment
Cash payment USD 1.67 (11%) USD 0.96 (1.5%)
Limited-purpose e-payment USD 0.50 (3%) USD 0.45 (0.7%)
The Pantawid
Pamilyang Pilipino
Program (4Ps)
The Ti Manman
Cheri (TMC)
Program, Haiti
Ti Manman Cheri in Haiti
9Photo Credit: CGAP Photo Contest 2015
Core objectives
• Support poor mothers with school-age children
• Ensure school attendance and retention of recipients’ children
• Empowerment of Haitian mothers
Delivery method
• 30% via Digicel’s TchoTcho Mobile Account (receive SMS notification)
• 70% through Unitransfer paper vouchers
Objectives for using e-payments
• Minimize time to scale up (efficiency)
• Minimize recipients access costs and time
• Minimize leakage
• Potential for financial inclusion
TMC - Challenges
Country-level readiness, especially for mobile solutions, was overestimated
• Digicel’s mobile money agent network not strong enough outside of Port au
Prince
Technical capacities required were often underestimated
• data errors and inconsistencies between data in the Digicel and the government
systems
Internal and external pressure on design and implementation was inevitable
• Government put unexpected pressure on Digicel to expand payments to areas
where agent network was not yet fully developed
Agents affected the experience of recipients and inadequate agent behavior
put recipients at risk
• Tension between processing payment quickly versus teaching recipients the
payment method
Appropriate recipient recourse mechanisms built confidence and trust
• Digicel had foresight to implement a TMC-only call center
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Pantawid Pamilyang Pilipino Program
Core objectives
• Provide short-term poverty alleviation
• Break the intergenerational poverty cycle through investments in health
and education
Delivery method
• 41% have account-linked “cash card” from the Land Bank of the
Philippines (LBP) that they can use at LBP and partner ATMs
• 59% collect transfers in cash over the counter from LBP and partners
Objectives for using e-payments
• Minimize leakage
• Promote dignity of the recipient
• Required by regulator
11Photo Credit: Zimmerman and Bohling 2014
4Ps - Challenges
Country-level readiness, especially for mobile solutions, was overestimated
• Service unavailability: limited agent and ATM network, liquidity, service hours
Technical capacities required were underestimated
• Unitransfer vouchers had to be cashed out in full
Internal and external pressure on design and implementation was inevitable
• Political pressure to scale up and use only one PSP
Agents affected the experience of recipients and inadequate agent behavior
put recipients at risk
• Unauthorized fees, unofficial group payments, agent-controlled payment
process, agent incompetence
Recipient capability was greatly affected by program and payment method
training
• Confident use of ATMs (security guards implemented) and PINs--but 60%
transact OTC
Appropriate recipient recourse mechanisms built confidence and trust
• Recipients are aware of complaints mechanism, yet inefficient resolution, no
specific support hotline for agents12Photo Credit: CGAP Photo Contest
5 learnings how digital cash transfers will work better
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Photo Credit: Zimmerman and Bohling 2014
1. Ensure reliable payments
first
2. Create sufficient
communication channels
with recipients
3. Incorporate contingency
planning and risk
assessments
4. Ensure a value
proposition for all
stakeholders
5. Be willing to invest
Build the bridge from transfers to sustainable
development
Three characteristics of a financially inclusive transaction
account
1. Safe storage
2. Transaction capacity
3. Accessibility
14Photo Credit: CGAP Photo Contest
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Please find further publications and studies on these and
more digital social transfers on www.cgap.org
Silvia Baur [email protected]
Thank you for your attention
Photo Credit: Silvia Baur
16
Advancing financial inclusion to improve the lives of the poor
www.cgap.org