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I would suggest a further differentiator as to aid disbursement is whether it is targeted to the individual or to broad projects. The former is where we see hope that progress can be made, as long as we can get away from cash as the payment method - and we can deliver the funds at an acceptable, auditable cost.
The key to any such aid delivery is to link the settlement with any other funds that may be going to the beneficiary in a single, electronic structure. For instance, they may have government benefits (such as pensions), wages, financial inclusion investments and funds from families at home and abroad.
The last of these is where our non-profit group has been concentrating efforts, with a target of zero cost for both the sender and the recipient as long as the transaction stays electronic.
When a merchant is able to accept electronic payments, i.e. from a mobile-phone based message or even from a card on a mobile POS reader, the zero cost for the merchant as well is another important incentive to motivate all unbanked and under-banked recipients to stay cashless.
It would be naïve to imagine that cash will ever be ruled out entirely, so there does have to be a simple facility to get such funds from local agents. The cost of doing so, under our formula, of 4.5% is within the World Bank and G20 target range, but has sufficient variance with the zero cost as to still incentivize staying cashless.
The other facet we see as being highly desirable for optimizing aid to the poorest is to enable them to use their money for investment, insurance and managing their payments for utilities, rent etc. in as friendly and efficient a manner as possible.
The involvement of national and local governments is clearly important, not least in communicating to the unbanked how they can get these basic financial services - and in helping secure such facilities. Similarly, there is a need for at least one local partner in every country, such as telcos and banks, who will have commercial interests in this delivery format.
We welcome any show of interest from governments and aid agencies looking to distribute funds to the least advantaged, as well as encouraging regulators to contact us to ensure that all aspects of AML and general anti-criminal and tax evasion issues are confronted head on.
The problems of very high costs for P2P transfers, often up to 20%, are significant and need rectifying by joint action. This is not just an unjustified fee on the poor, but is also an encouragement for them to use the black market, operated by criminal groups. The more we can do to make sure the flow of all funds, whether from family, aid agencies, employers or governments, are managed at zero cost, the better for creating effective support for the most needy.