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Assistance delivered, on time

Electronifying and institutionalizing cash programming in the Americas

Scott DiPretoro, Disaster Management Delegate, IFRC

When disaster strikes the need for unconditional cash assistance can be immediate, but all too often its impact on the recovery of affected families and local markets is lessened through its late arrival.  As was the case in Haiti five years ago, the set-up time needed to identify an appropriate way to deliver cash, including vetting and contracting  a service provider, developing related procedures, training staff and putting the system in motion, can severely delay the provision of emergency assistance.  In order to be better prepared to provide this assistance rapidly to highly urbanized populations in Latin America & the Caribbean, the International Federation of Red Cross and Red Crescent Societies (IFRC) has been developing a universal e-transfer mechanism for cash that can be utilized on a regional basis, in a secure and accountable manner.  

As with other humanitarian actors, IFRC’s use of cash transfer programming (CTP) has been gaining significant traction and over the past two years 30% or more of its disaster response operations in the Americas have included a CTP component, utilizing a variety of one-off delivery mechanisms that are mostly developed mid-operation.  Being a technical support provider for the 35 National Red Cross Societies in the Americas, and as an organization that has made CTP a strategic priority, IFRC must be able to provide post-disaster CTP guidance and resources in any of these countries at a moment’s notice.  Various preparedness initiatives to further institutionalize and mainstream CTP into response and recovery operations have achieved progress, but  higher implementation rates have created an additional challenge having a cross-border delivery mechanism in place that is both standardized and electronified.

In 2013, with support from a Visa Innovation Grant, an initiative was launched to do just this.  Taking into account that 80% of the population in Latin America and the Caribbean live in urban settings and the ubiquity of ATMs and point-of-sale (POS) terminals in the region, a prepaid debit card system was identified as a potentially viable universal solution.  Consultations were then conducted with industry experts and a non-bank service provider was identified that coordinates the necessary linkages between the issuing bank, card fulfilment house, debit card transaction processor and the payment card networks.  Having the ability to ship and activate the prepaid debit cards in over 90% of countries and territories worldwide, IFRC now has a digital payment system in place for the Americas that it can potentially replicate and implement on a global basis. 

                              

Photo: Open Data electronic registration and distribution system, and a beneficiary with his prepaid debit card, Jamaica, February 2015. Credit: IFRC

 Procedures for management and use of the system, inclusive of roles for field-based disaster managers and finance and logistics personnel, along with beneficiary communications tools, have been developed.  The card management software platform provided by the vendor allows for IFRC to have full control of the prepaid card system, from ordering, activating and tracking cards to controlling user permissions and program functionality, as well as generating real-time reports to monitor the status and security of our program. With all service provider relations handled at the regional level, including contracting, card inventory management, card funding and reconciliation, IFRC eliminates any financial and administrative burden for our implementing National Red Cross Society partners; allowing them to focus on the timely delivery of assistance in affected communities.  In order to deliver the cards at scale in an accountable manner, the parallel development and testing of an electronic beneficiary registration and distribution system is continuing apace. 

Although the cards are envisioned to be used unconditionally for basic needs, to replace essential assets in the first few weeks after a disaster, an option also exists to condition the use of the cards by restricting transactions to POS terminals at certain merchant category codes, such as those classified as grocery or building materials stores, or even to specific merchants.  Beyond IFRC’s current program set-up for single load, 12-month expiration cards, it is also able to add on to its account sub-programs for reloadable cards, longer expiration cards for prepositioning purposes, as well as put in place a prepaid card program to electronically cover mission expenses for deployed delegates. 

A customized configuration has recently been completed to the back-end capabilities of the software platform, a separation of card inventory and funding accounts by our internal project finance codes, enabling IFRC to effectively manage the use of the system across multiple operations and countries.  The cards can also be special-ordered to best reflect the local context, with the ability to print the name of the National Red Cross Society and the intended use of the card, such as “Humanitarian Aid”, in the lower left corner.  Additionally, the tri-fold carrier, to which the card is attached in a sealed envelope, has the card’s standard terms, fees and usage instructions printed in two languages.  This allows IFRC to have a prepositioned stock that meets the language needs of the majority of the region. 

The system is now live and an initial pilot was recently completed in Panama with an additional pilot scheduled at the end of February 2015 in Jamaica.  With the establishment of this e-transfer mechanism it is anticipated that cash programming will become a more systematic tool for multi-sectoral responses, and in turn increase the cost efficiency, speed and impact of our humanitarian assistance.  CTP advocacy and socialization, training, contingency planning and the roll-out of assessment and implementation tools continue and now we are even better prepared institutionally to respond at scale, with one card, one system, that can be readily activated…at the push of a button. 

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