Chapter 10 Beyond the COVID-19 Crisis: A Framework for Sustainable Government-to-Person Mobile Money Transfers

International Monetary Fund

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International Monetary Fund

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Keywords:: cash transfer; Wave money; CICO network; public finance; cash program; Currencies; Digital wallets; COVID-19; Africa; Global; Sub-Saharan Africa; end-to-end money flow

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Abstract

The Global Informal Workforce is a fresh look at the informal economy around the world and its impact on the macroeconomy. The book covers interactions between the informal economy, labor and product markets, gender equality, fiscal institutions and outcomes, social protection, and financial inclusion. Informality is a widespread and persistent phenomenon that affects how fast economies can grow, develop, and provide decent economic opportunities for their populations. The COVID-19 pandemic has helped to uncover the vulnerabilities of the informal workforce.

Background

As the coronavirus disease 2019 (COVID-19) crisis unfolded, countries across the world promptly expanded their social protection systems to provide support to workers and households. On average, countries have spent an additional 1 percent of GDP to expand existing social programs—insurance, assistance, and labor market–related—and have introduced new ones.¹ Additional fiscal outlays have mainly financed the expansion of social assistance systems to cover more than 1.8 billion people worldwide (Gentilini and others 2020).

Government-to-Person Social Transfers during an Unprecedented Crisis

Countries most often chose government-to-person (G2P) monetary transfers, representing about 51 percent of all social measures planned and implemented, with coverage more than doubling to 38 percent of the population, on average, over 5 months (Figure 10.1).

Scalability and reachability of G2P transfers are essential as the COVID-19 crisis requires governments to cast safety nets more broadly than for conventional shock response. The pandemic and containment measures are affecting all economic sectors, generating large negative income shocks disproportionately across the bottom half of the income distribution (Figure 10.2) and among informal business owners.² Many countries have combined benefit programs—monetary and in-kind, digital and analog, old and new—to broaden their support to households with little or no previous links to social protection systems and to maximize their reach.

The rapid expansion of G2P transfers bears several risks, from duplication and high administrative costs to the undermining of well-functioning social programs improperly repurposed for COVID-19 response efforts. For example, the Philippine government established an emergency subsidy program targeting 75 percent of its population and automatically enrolling beneficiaries of the country’s flagship conditional cash transfer program, Pantawid Pamilyang Pilipino Program. However, some confusion over rules and unclear communication, combined with changes to the original program’s selection and delivery modalities, created social discontent (Fischer, Dadap-Cantal, and Ramos 2020). Therefore, countries that have invested in building scalable and shock-responsive social safety nets are better positioned to face crises such as COVID-19.

Many emerging market and developing economies must build on weak and patchy social protection systems and frequently lack crucial information to further expand social protection. Often, existing social programs provide insufficient benefits and have low coverage at the bottom of the income distribution (the percentage of the bottom income quintile population receiving social protection benefits) and provide insufficient benefits (Figure 10.3, panel 1).

Informality further compounds these structural weaknesses (Figure 10.3, panel 2), because governments require verifiable information on employment and income to target public support on the basis of means. Such data are typically only available for workers in the formal sector who are officially registered as employees or are self-employed and potentially liable for payment of income and social security taxes. The lack of data for informal workers therefore restricts governments’ ability to effectively target resources to the most affected households. Even in the formal sector, support channels have limited ability to provide employers with liquidity through loans or grants so that they can pay employees throughout the crisis.³

The Importance of Basic Delivery Components

Governments’ ability to reach workers and households with lifeline support differs vastly across countries, depending on the availability of basic delivery components (Prady 2020). Three integrated elements are at the core of the delivery of broad and adequate income support: (1) a universal identification (ID) system, (2) socioeconomic data on households, and (3) a mode of benefit delivery (Figure 10.4, panel 1). Not all countries have the necessary elements to scale up emergency lifeline support. The unavoidable result is short-term prioritization across competing objectives. That is, broad population coverage of lifeline support, fiscal sustainability, and virus containment. We can therefore describe a simple taxonomy of countries by how ready their social assistance programs are to respond to crises (Figure 10.4, panel 2):

Ready. Countries with wide prior coverage for two of the three elements are ready to leverage their delivery infrastructure and provide support at scale. For example, over the past decade, India has integrated its universal biometric ID system, Aadhaar, with bank accounts and social programs. Pakistan has a robust national ID system and a social registry covering 87 percent of its population.
In-Between. Many countries have in place some or all of the necessary elements, but the elements may not be comprehensive. For example, Bangladesh and Togo have high mobile money penetration but no robust ID system. The Philippine social registry covers 75 percent of its population, but a reliable ID system is lacking and bank coverage is limited.⁴
Not Started. This category consists mainly of low-income countries with a narrow or no safety net and only rudimentary delivery platforms (for example, Haiti and Lao P.D.R.).

Countries have put in place emergency policies to overcome delivery infrastructure weaknesses during the COVID-19 pandemic, with G2P mobile transfers being key to governments’ response, especially in high-informality contexts. Governments are leveraging the high penetration of mobile phones and mobile accounts compared to bank access points⁵ to rapidly scale up their monetary support to workers and households (Figure 10.5). Mobile money can be leveraged to reach informal business owners, who tend to use mobile money more often than the average population (Ayana Aga, Jolevski, and Muzi 2020).⁶

Mobile networks can be used to achieve multiple objectives: (1) disseminate crucial information, (2) collect household and individual data to better target support, and (3) deliver money:

In Brazil, the temporary Auxílio Emergencial targeted mainly at informal and own-account workers is delivered through mobile money accounts, with citizens registering through a website or an app. Eligible workers may open a mobile savings account with basic functionality at one state-owned bank.
Nigeria partnered with mobile network operators to identify vulnerable informal workers in urban areas through airtime purchase patterns.
In Peru, informal workers who do not have a bank account but are eligible for the Bono Independiente receive through SMS a code and an access link to a simplified mobile banking system.
In Togo, the authorities have introduced a new cashless transfer program, Novissi, targeting adult workers in the informal economy affected by the lockdown, for example, moto taxi drivers. Beneficiaries are identified through their voter IDs (which cover more of the population than national IDs).⁷ Transfers are then made through mobile money, with an additional payment for female recipients, and digital payments are further encouraged to prevent handling of cash.

Strong G2P Mobile Transfers for Strong Social Protection Systems

G2P mobile transfers present many advantages relative to other forms of governmental transfers (Table 10.1), especially in the context of social distancing. About 20 percent of emerging market and developing countries use cash for social benefits payments, often because their financial ecosystems remain underdeveloped (Lindert and others 2020). However, in-person cash provision presents many logistic (transportation, security, payment dates), health, and individual challenges (for example, costs to beneficiaries to receive payments at a scheduled time and place) that G2P mobile transfers do not. For example, in Niger, program recipients receiving cash had to travel approximately 2 kilometers (one way), or about half an hour, to receive the transfer, whereas the group receiving transfers through mobile money had to travel less than 0.5 kilometers (less than 10 minutes) (Aker and others 2016).

Mobile transfer platforms promote strong social protection systems that provide equitable and effective coverage for poor households and those vulnerable to poverty. G2P mobile transfers can support inclusive growth (by bringing financial accounts to enable the unbanked to build savings and credit history, empower women financially, and help small and medium enterprises grow within the formal sector) and efficient government operations (by providing prompt support while maximizing public resources through more transparent and efficient management).⁸

^{Table 10.1.}

Channels to Deliver G2P Payments

Source: G2Px 2020d. Note: G2Px (2020d) provides further insights on the market aspects for governments to consider when choosing emergency social assistance payment options. ATM = automated teller machine; G2P = government to person.

^{Table 10.1.}

Channels to Deliver G2P Payments

Format	How/Where to Receive	Where to Save	How/Where to Use	Pros	Cons	Examples
Cash	Post office, agents, bank	Home	Anywhere	Simple, trusted	Risk of waste and theft, human interaction	Ecuador, India
Money order	Post office, bank	Home	Can only be cashed out	Authentication, no bank account	Same as cash	Tunisia
Cash card	Post office, AT M	Home	Can only be cashed out	Authentication, no bank account	Same as cash	Brazil, Philippines
Bank account	Bank, ATM	Bank account	ATM, debit card, checks	Secure, no human interaction	Need bank account	Colombia, Peru, United States
Mobile payment	Remotely	Mobile	Merchants and agents	See “Strong G2P Mobile Transfers” subsection	Need mobile phone, digital literacy	Jordan, Kenya, Uganda, Zimbabwe

^{Table 10.1.}

Channels to Deliver G2P Payments

Format	How/Where to Receive	Where to Save	How/Where to Use	Pros	Cons	Examples
Cash	Post office, agents, bank	Home	Anywhere	Simple, trusted	Risk of waste and theft, human interaction	Ecuador, India
Money order	Post office, bank	Home	Can only be cashed out	Authentication, no bank account	Same as cash	Tunisia
Cash card	Post office, AT M	Home	Can only be cashed out	Authentication, no bank account	Same as cash	Brazil, Philippines
Bank account	Bank, ATM	Bank account	ATM, debit card, checks	Secure, no human interaction	Need bank account	Colombia, Peru, United States
Mobile payment	Remotely	Mobile	Merchants and agents	See “Strong G2P Mobile Transfers” subsection	Need mobile phone, digital literacy	Jordan, Kenya, Uganda, Zimbabwe

G2P mobile transfers should be supported by a comprehensive and sustainable ecosystem to fully exploit their advantages. As countries transition from emergency COVID-19 responses to normal operational mode, quick fixes implemented to scale up lifeline programs must be revisited and strengthened to support stronger social protection systems and strategic national goals, such as inclusive growth. Emphasis should be on the scalability of social protection systems, incorporating shock-responsive design features,⁹ and limiting program exclusion errors from the outset in a fiscally sustainable manner (in other words, progressive universalism).¹⁰

Yet G2P mobile transfers cannot provide adequate solutions to all social protection challenges, and they must complement other support programs, for example, in-cash or food distribution systems.¹¹ G2P mobile transfers can, however, strengthen social protection systems, provided that governments are aware of and follow certain design and implementation steps. In the following section, these steps are detailed within a comprehensive framework that will help governments optimize G2P mobile transfers.

An End-TO-End Framework to Guide Evolution of Mobile G2P Payments

A holistic framework, based on past G2P and mobile payment experiences, can inform short-term measures taken in context of the pandemic crisis to ensure the measures are sustainable, mitigate risks, and allow iterative improvements. This section describes a framework to enable a sustainable G2P monetary transfer through a mobile payment (“mobile G2P”) program.¹² The framework is composed of eight building blocks (Figure 10.6) that help stakeholders assess the country’s readiness in implementing mobile G2P along foundational enablers. These enablers are explained in detail in Annex 10.1, which describes various implementation paths to increase the maturity of a mobile G2P program, depending on the country’s existing conditions.

The building blocks reflect the end-to-end money flow in a mobile G2P ecosystem. A government introducing a new G2P mobile money program to reach both banked and unbanked individuals often follows the steps presented in Figure 10.7:

1. The government selects one or multiple mobile money operators (MMOs), entities allowed to issue electronic money to customers with or without a bank account, through mobile wallets. MMOs include mobile network operators (MNOs, such as Orange), commercial banks, or fintech firms that offer mobile money in the country. National databases or MMO data are used to select applicants who meet the program’s eligibility criteria.¹³ The government wires the money to the bank partnered with the MMOs and shares the identity of eligible recipients.
2. Banks convert these funds into mobile money.
3. MMOs organize information and outreach campaigns to help beneficiaries apply through an established know-your-customer (KYC) process using the identity plan approved by the government. Recipients are given a mobile wallet containing the amount of mobile cash distributed by the government.¹⁴
4. From here, beneficiaries can start using their mobile wallet.

Mobile wallet owners can then either cash out the money, typically through a local agent partnering with the MMO, or pay utility bills or purchase goods and services at merchants that accept mobile money. (The latter scenario supports social distancing in the COVID-19 context.) The framework shows the required infrastructure to facilitate mobile payments. The rest of the chapter describes enablers supporting such programs.

A clear understanding of each of the eight interdependent building blocks is critical for a successful mobile G2P program. The building blocks signal to policymakers and regulators where and how to adapt their country’s regulatory framework in support of G2P mobile transfers. Each building block influences the success of a mobile G2P program. If any block is not properly managed or designed, the program may face serious risks. For example, failing to properly design and regulate financial institutions and MMOs may diminish unbanked individuals’ trust in mobile cash. Likewise, if policymakers fail to incentivize acceptance of mobile money within a sufficient merchant network, many beneficiaries will exchange their mobile money for cash. This could create long lines at cash-out agent offices, endanger social distancing measures, and increase individuals’ costs to receive the benefit.

Policymakers should approach the enablers as minimum conditions for the specific maturity of their country’s mobile G2P program and plan iterative improvements. As COVID-19 has forced countries to deliver monetary assistance under time pressure, governments with a mature mobile money ecosystem (for example, China, Kenya, and Tanzania) have been able to react faster and more effectively (Rutkowski and others 2020). However, many countries have been able to transfer mobile cash despite the low maturity of their mobile ecosystem, suggesting some enablers are within reach of many emerging market and developing economies. This chapter presents the three maturity stages (Figure 10.8) countries can achieve for each enabler:

1. “Minimum required” enablers can place the mobile G2P program on an easier improvement trajectory.
2. “Good-to-have” enablers allow G2P programs to reach broader segments of a better-identified population to limit certain risks and to achieve economies of scale.
3. “Great-to-have” enablers develop iteratively as technology and adoption patterns change but represent the current state of the art. Today, great-to-have enablers are well illustrated by M-Pesa in Kenya and WeChat Pay and Alipay in China.

The framework maturity tables in Annex 10.1 help stakeholders identify their current situation, as well as provide possible evolution strategies.

Building Block 1: Beneficiaries

Our framework promotes a user-centric approach that places beneficiaries at the center of each building block. The design of G2P cash programs must answer three questions: Who is eligible? How do those eligible prove their identity? How can governments maximize adoption by beneficiaries? These three enablers are informed by previous G2P experiences in various countries and by measures introduced during the pandemic crisis.

Eligibility Criteria

Eligibility criteria must rely on information broadly available across the population to minimize inclusion and exclusion errors. Criteria must further be as transparent as possible to minimize the probability that applicants will be rejected during a crisis (for example, basic demographic characteristics, such as age, gender, household composition, or location). Recourse mechanisms should also be in place to limit errors.

Exclusion criteria may be easier to design than inclusion criteria if the risk of exclusion is high. The success of the Keluarga Harapan program in Indonesia in 2017 was based on precise data from the Ministry of Social Affairs for mobile money transfers to pregnant and lactating mothers, infants, the elderly, and people with disabilities (Sri Sulastri and Ravi Kumar 2019). Likewise, India clearly communicated exclusion criteria for its COVID-19 transfer program, such as specific professions or individuals paying personal income tax. Absence of reliable citizen registries might force policymakers to use alternative data sources (see Building Block 2) or to make difficult trade-offs (Una, Allen, and others 2020; Una, van Eden, and others 2020).

KYC Requirements

KYC requirements specify which proof of address and proof of identity, such as voter card, national ID card, or health coverage ID, are needed to register for a program. This enabler also describes how to access or spend the mobile money after registration—personal ID number, password, biometric data, and the like. Some central banks, as in Colombia and Ghana, have also opted to reduce KYC requirements for small payments to ease onboarding of the unbanked and undocumented population. The FATF provides guidance for governments to collaborate with financial institutions and businesses on digital onboarding and simplified customer due diligence during the COVID-19 crisis, while maintaining vigilance against fraud (FATF 2020b).

User Experience

As illustrated in Figure 10.9, for a G2P program to achieve widespread adoption, each step from registration to use of money must be understandable for beneficiaries. In past G2P program rollouts, some governments have not paid enough attention to the user experience, leading to mixed results, including the lack of improvement in financial inclusion (Baur-Yazbeck, Kilfoil, and Botea 2019).

Building Block 2: Digital Government

Many emerging market and developing economies lack reliable and broad socio-economic data—especially in the informal sector—and do not have shock-responsive public finance management systems to aid with crises (IMF 2018). Countries with more complete socioeconomic information can more precisely target households in need of support. Such countries may also have access to advanced technologies, such as digital ID, data analytics, and fraud detection systems to cope with the volume of public funds being remitted. Even imperfect data and technology can be used to ensure that payments are timely, secure, transparent, and adequately controlled and reported. Close collaboration and data-sharing mechanisms across public agencies and with private partners such as MNOs can mitigate the lack of accurate or universal government data on households, especially in the informal sector.

Governments can use the following three enablers to ensure inclusion of individuals in need while limiting public finance risks.

Social Registry

If no reliable database exists or data are only available for a narrow share of the population, individuals should be able to apply for a G2P transfer with simple information, ideally through digital platforms. This information can then be used to enroll eligible individuals into support programs.

For example, Jordan identified households eligible for an emergency cash transfer through the Takaful program social register. During the COVID-19 pandemic, the scope of households eligible for emergency assistance expanded beyond Takaful recipients, and recipients’ online enrollment increased, with beneficiaries allowed to open a mobile wallet or connect their bank account for direct cash transfer (G2Px 2020b). The Takaful platform enhanced cash transfer delivery systems through online registration, automatic data verification, improved targeting, and a robust grievance and redress mechanism.

Other ways to identify people in need can complement incomplete social registries, for example, community-based referrals. In Rwanda, for example, the Ubudehe “grassroots network” was leveraged to identify the most affected urban and peri-urban households in Kigali (IMF 2020b).

Standards and Open Architecture

Standards and open architecture are the technologies supporting our end-to-end framework and the implementation of mobile money platforms. In Peru, authorities were able to rapidly transfer money through the country’s BiM (Billetera Móvil) mobile money platform, which is open to financial institutions, MNOs, and fintech firms. The development of standards (Box 10.1) accelerates the deployment of open mobile money platforms and related digital financial services and fosters compatibility with card payment and other payment systems (GSMA 2020a).

^{Box 10.1.}

Emerging Standards and Open Architectures for Mobile Payment

GSMA Mobile Money API

The Global System for Mobile Communications Association (GSMA) and the mobile money industry created a communication standard for mobile money use cases, including domestic and international remittance, merchant payments, bill payments, and interoperability of mobile money accounts across financial institutions. According to GSMA (2020c), this application programming interface enables faster implementation and reduces total cost of ownership in three ways: (1) rapid adoption by partners, (2) ease of support and maintenance, and (3) increased capability for the industry as a whole.

The interface may be used by any stakeholder in the mobile money industry, which can facilitate integration between mobile money providers, for example, mobile money operators, banks, merchants, application developers, and other actors. This standard accelerates countries’ mobile payment projects by offering technology best practices, such as RESTful architectural principles to allow scalability, the JavaScript Object Notation data format and the International Organization for Standardization’s standards for better interoperability, and virtualization of payment functions to facilitate implementations and upgrades. The application programming interface also provides best-practice security recommendations.

Mojaloop

Mojaloop was developed in 2017 by the Gates Foundation in cooperation with fintech developers within the Level One Project. The goal is to make digital financial services more inclusive and more accessible to the world’s poorest populations.

Mojaloop is a publicly available open-source code for creating digital payment platforms, offering functions including a push payment model with same-day settlement and notification from payer to payee; interoperability between all mobile money actors, such as financial institutions and regulated nontraditional financial service providers; adherence to international standards (for example, the payment data standards in ISO 20022); system-wide fraud and security protection; and proportional identity and know-your-customer implementation based on a country’s needs, transactions, and the services provided.

In 2018, mobile telecommunications providers Orange and MTN announced a joint venture called Mowali, an implementation of Mojaloop, to enable interoperable payments across Africa. Mowali facilitates financial flows between mobile money users across service providers and countries and could benefit government-to-person programs. The partnership aims to link more than 100 million mobile money accounts and operations in 22 of sub-Saharan Africa’s 46 markets.

Streamlined Controls and Effective Procedures

Existing procedures and controls of some countries’ core public finance management systems are not designed to deal with emergencies such as COVID-19 and may introduce complexities and delays incompatible with urgent actions. This enabler explores how countries are modifying or temporarily adjusting systems, procedures, and treatment capacities to promote a transparent and effective emergency response (Una, Allen, and others 2020).

Building Block 3: Mobile Money Operators

G2P mobile payments rely on a robust and effective collaboration between the government and MMOs (Box 10.2). In many countries, mobile payment is offered by MNOs, which already have a strong presence for basic voice and data services. When nonbanks are sufficiently regulated to provide financial services, as is often the case in Southeast Asia and Africa, they can help accelerate G2P programs. For example, GCash, a Philippine fintech company, was able to rapidly respond to the government’s call to enable mobile G2P payments by leveraging its platform and network. Wave Money in Myanmar has greatly facilitated G2P mobile payments while providing users with additional digital and financial assistance. Other nonbank tech companies, such as GrabPay in Malaysia, have been central to the success and speed of government cash transfers.

^{Box 10.2.}

How USSD Mobile Wallets Work

In most emerging market and developing economies, mobile services are accessible through a technology called unstructured supplementary service data (USSD). USSD provides text-only services, including financial services, that users can access by dialing a short code on their phone. For example, customers from Orange Money in Liberia would dial *144# to check their mobile wallet balance.

As with short message service, USSD works on standard phones and smartphones without the need to install any app, and a subscription to mobile data is not required. USSD mobile wallets can thus become available in an entire country, for every customer of a service provider, the moment the service is deployed on the network. USSD services are therefore cost-effective and popular, albeit not user friendly.

Box Figure 10.2.1 shows how a user would interact with a mobile wallet before sending mobile money to another person or a merchant.

Regulators should note that USSD infrastructure is typically owned and operated by mobile network operators. However, mobile wallets can also be offered by third-party mobile money operators, which are typically banks. In several countries, mobile money operators have been barred from accessing USSD by dominant mobile network operators (Consultative Group to Assist the Poor 2014). In a crisis, policymakers must eliminate this concern to accelerate mobile wallet deployment at a low cost.

MMOs often provide payment capabilities, including payment networks or payment rails, previously nonexistent in emerging market and developing economies. In Kenya, M-Pesa emerged from Safaricom’s telecommunication network to enable a new form of payment. In Nigeria and Uganda, the fintech company Interswitch provides payment capability for merchants and individuals.

Compared to banks, MNOs and fintech firms also tend to have more mature mobile services, higher customer trust, and better user experience. MNOs also often provide broader agent networks (GSMA 2020a). These advantages have fueled the success of mobile money in many countries, particularly in Africa (M-Pesa in Kenya, Tigo Cash in Tanzania, or fintech firms Paga in Nigeria and Yoco in South Africa) and Asia (Tencent and Alipay in China). In South Asia, mobile money has recently gained traction with an annual growth of 46 percent, the highest across all regions (Chhabra and Das 2019).

Quality of Service

Although many MMOs provide sufficient digital financial services, they may not all qualify for an effective G2P partnership. Governments may clarify the expected services, as well as the required risk-management and reporting requirements. Tigo, an MNO that provides mobile money services in Paraguay and Tanzania, owes its success to high-quality services designed for maximum user adoption (Annex 10.1). Partnering with fintech firms that develop products with well-designed user experiences has led to the successful adoption of G2P programs in Southeast Asia.

Agent Network Coverage

This includes the availability of agents, typically small local retail stores, in urban and rural areas and the quality of service they provide. Nonretail stores—basically independent individuals setting up a temporary stand and acting as agents—also influence some markets. Such coverage is essential when online onboarding and remote support are not available, considering these agents are the “face” of the service.

Mobile Coverage

MNOs’ partners must have adequate and reliable mobile coverage (at least 2G and, when feasible, 3G) across a country. Coverage is particularly necessary in harder-to-reach rural areas to prevent exclusion of populations in need. In other words, MNOs must reduce, rather than widen, the “digital divide” (Building Block 8). To overcome inadequate coverage in regions where such services would be commercially unviable for private providers, Zambia issued new policies, changing the digital payment fee structure to boost MMOs’ coverage (Baur-Yazbeck 2019).

Mobile Money Regulatory Requirements

MNOs need to ensure that the full equivalent of government-issued outstanding mobile money is invested in safe liquid assets, such as commercial bank deposits and low-risk government securities in regulated financial institutions through trust or escrow accounts. Most countries have adopted regulatory requirements for MMOs to safeguard consumer funds (GSMA 2016).

Building Block 4: Financial Institutions

Financial institutions will receive funds directly from the government and place them in a mobile money account for participants such as MMOs, cash-out agents, and merchants (Figure 10.7). Countries usually have at least one regulated financial institution connected with the government’s treasury.

Governments wanting to establish or strengthen their collaborations with participating financial institutions or identify alternative options, such as MMO services, may consider the following enablers.

Branches and ATM Safety

G2P beneficiaries are likely to use banks or ATMs to exchange their government-issued mobile money against cash, even in countries where mobile payments are widely accepted, such as Kenya and Tanzania.¹⁵ During the pandemic, some governments have mandated social distancing measures for banks that make cashing out G2P mobile payments more difficult—and, paradoxically, lead to long queues and waits at scarce cash-out points. A combined policy of easing mobile payments and multiplying and diversifying certified cash-out agents is therefore key to safe and inclusive G2P mobile transfers (see Building Block 5).

Ease of Doing Business and Trust

Governments must assess the ability of participating financial institutions to interact with the population effectively. Customer trust, ease of doing business, user support, and internet presence are important success factors. During the COVID-19 pandemic, Pakistan’s central bank requested that banks open their call centers 24 hours a day, seven days a week to reduce customer visits and to assist with basic operations. In Colombia, some banks use a simplified KYC requirement to provide unbanked beneficiaries with mobile wallets (G2Px 2020a).

Risk Management

Participating financial institutions are accountable for the integrity, security, and privacy of financial and accounting information, as well as for fraud prevention, such as robust KYC policies and anti–money laundering/combating the financing of terrorism (AML/CFT). The risk-management enabler also applies to Building Block 3 for MMOs. To adopt new beneficiaries and to foster mobile payments, the Bank of Ghana authorized mobile money customers to use their existing KYC-protected accounts to register for the country’s COVID-19 aid program (Bank of Ghana 2020).

Building Block 5: Cash-Out Network

G2P cash transfer programs use cash-in/cash-out (CICO) networks to allow beneficiaries to safely exchange mobile money for cash. Studies have shown that most beneficiaries withdraw 100 percent of their payment immediately (McKee, Kaffenberger, and Zimmerman 2015). In traditional banking (Building Block 4), CICO locations include direct channels, such as bank branches and ATMs, and indirect channels, such as retail outlets, supermarkets, and pharmacies.¹⁶ These indirect channels are also used by MNOs with a CICO network of their own or managed by a separate agent network.

The following enablers should be considered when assessing whether a country’s CICO network is ready to support G2P programs.

Delivery Channel Mix

G2P programs should aim for diversified and dense delivery channels with reach in remote and rural areas. Traditional channels, such as bank branches and ATMs, and governments’ direct channels, such as post offices and local authorities, should be complemented by mobile money agents with broad outreach in emerging market and developing economies. Mobile money networks have, on average, 20 times more reach than bank branches (GSMA 2020a). Some governments have incentivized participants to operate in regions with low return on investment. For example, Kenya introduced tiered fees to promote better services in underserved regions during the pandemic (McKay and Mdluli 2020).

Liquidity Management

Projecting estimated cash-out volumes; enlisting the support of banks and third parties, such as agent network managers; and preventing crowd formation have been essential during the pandemic. Ecuador doubled the number of cash-out access points during the crisis and established payment dates based on the last digits of beneficiaries’ IDs (LLorente y Cuenca 2020). Peru used a geolocation system to direct beneficiaries to specific cash-out points at a given time (G2Px 2020c).

Trained Personnel

ATM withdrawals are common, yet mobile money beneficiaries may be interacting with staff who should be trained and knowledgeable about the program, undergo regular audits, and provide adequate customer service. Beyond G2P programs, many emerging market and developing economies have introduced initiatives to improve digital and financial literacy. Such resources could be coordinated to include CICO agents.

Building Block 6: Payment Acceptance Network

A large merchant network, as well as other public and private actors, could further encourage beneficiaries to opt for mobile payments when possible, thus reducing cash out. Businesses should be involved in the design of programs to limit cash out of G2P payments.

Digitization of payment has become a reality in many countries. In 2019, for the first time, more value circulated in the mobile money system than left the system, setting the stage for a broader acceptance by the population to use and save mobile money (GSMA 2020a). In 2018, to cope with cash shortage, the central bank of Zimbabwe, the main mobile operator Econet Wireless, and Mastercard partnered to enable merchants to accept Ecocash mobile money in stores already equipped with card readers. This allowed more than 3,800 merchants to be paid with mobile money. Such public-private partnership is key to reducing the use of cash.

The following enablers integrate payment recipients into the mobile G2P framework, enabling longer-term benefits from mobile money.

Mobile Money Life Cycle

A full digital payment ecosystem must ease the flow of mobile money across government (G), people (P), and businesses (B). In the near term, many countries are focusing on G2P and P2B payments. Annex 10.1 describes advanced models in which P2G, B2G, and B2B payments strengthen a comprehensive digital payment economy.

Fee Structure

A popular measure during the COVID-19 crisis has been the temporary reduction or elimination of mobile money payment fees (both for consumers and merchants).¹⁷ For example, the mobile industry of Ghana worked with the central bank to implement free mobile service transactions and promote mobile payments. Similar collaborations between the private sector and central banks in Kenya (Airtel), Uganda (Airtel and MTN), and Rwanda (most banks and MNOs) have facilitated the use of mobile money during the pandemic. Heavier taxation of mobile transactions relative to transactions through the banking system may prove regressive and have unintended consequences (GSMA 2020b).¹⁸

Payment Platforms and Interoperability

In many countries, mobile money development has been hindered by interoperability issues among banks, mobile wallets, and various payment schemes. Yet mobile money actors and governments are increasingly collaborating on improving interoperability of mobile payments.¹⁹ Before the pandemic, the Philippine central bank implemented the National Retail Payment System, a regulatory framework that requires interoperability among payment service providers—not only banks but also nonbank e-money issuers. This payment system greatly facilitated MMOs’ participation in the country’s PESONet and InstaPay automated clearinghouses.

Building Block 7: Business Model Elements

A mobile G2P program could benefit from industry best practices for digital solutions. The business model of any product covers not only customer experience and solution advantages but also the distribution channels, marketing strategy, change management, risk management, technology upgrades, and strategic partnerships. When correctly executed with a long-term view, such public-private partnerships can result in a more sustainable and effective service. The various elements of a robust business model are typically interdependent, and a single “broken link” in the chain (for example, poor fraud controls, technology downtime, or a confusing process to open an account) can impair an otherwise well-designed product.

Of the many enablers that define this building block, three are particularly important for sustainable success beyond the short-term objectives of income assistance.

Program Features

Clear and measurable parameters enable better performance tracking and reduce confusion. Examples of program features include eligibility criteria, the transfer amount, frequency, applicable conditions, and the duration. Some countries have considered conditioning some features to certain behaviors, for example, COVID-19 testing or using a portion of the money to make mobile payments.

Effective and Frequent Communication

Clear, simple, and well-publicized communication is critical to the success of any product. Togo prioritized targeting women in its Novissi G2P program and communicated clearly and simply through ads and social media. The effective communication and product management attracted twice as many women as men to the cash transfer scheme.²⁰

Program Management

A G2P program can be managed like any other major complex product. Clear definition of roles and responsibilities across building blocks, reporting processes, continuous improvement, and controlled deadlines and budget are basic expectations for product management.

Building Block 8: Digital Inclusion Foundations

The digitalization of payment can leave behind large shares of vulnerable populations (Zimmerman and Baur 2016). Households most affected by the pandemic are often the hardest to reach with technology physically, economically, and culturally (for example, women have less access to communication devices)²¹ or from a literacy standpoint. Close coordination with other government agencies and technology, telecommunication, and fintech companies may help countries bridge the digital gap that threatens to leave the most vulnerable segments behind (Davidovic and others 2019).

Digital inclusion involves various stakeholders and is an essential element of a successful mobile G2P program implementation. This building block can also support other development goals, including several of the UN’s Sustainable Development Goals for lowering poverty, bridging the gender gap, and reducing inequality. Certain regions, such as sub-Saharan Africa, are more exposed than others to the risk of digital exclusion, despite recent progress (IMF 2020a).

Digital and financial inclusion is a multidimensional and evolving topic that spans beyond the scope of this chapter. Still, two enablers could help policymakers improve the reach of mobile G2P to remote or poor populations.

Digital Access and Afordability

To benefit from mobile G2P, individuals need reliable electricity; affordable, sufficient connectivity; and connected devices, such as a computer or a mobile phone. People also need the knowledge to use the technology and the financial literacy to maximize the benefits of mobile wallet ownership. Alper and Miktus (2019) propose an Enhanced Digital Access Index to measure the ability of a population to access digital services (Figure 10.10). Countries have mandated service providers to reduce electricity and connectivity fees (Malaysia, Panama), strengthen availability and resilience (Argentina, Chile, Qatar, Vietnam), and explore new ways to provide connectivity.²²

Gender Gap

Over the past seven years, the digital divide between men and women in emerging market and developing economies has widened (Figure 10.11), which is especially challenging when women represent a majority of both the informal sector and caregiving communities particularly affected by COVID-19 (Zimmerman and others 2020).

Emerging market and developing economies should recognize the widening technology gap not only between women and men (International Telecommunications Union 2019) but also with migrants, internally displaced people, and persons with disabilities (United Nations 2020), and design accessibility of mobile G2P accordingly.²³ As part of its anti poverty program Ehsaas Kafalat, Pakistan has distributed free smartphones and biometrically protected bank accounts to 7 million poor women, significantly facilitating secure access to government money.

Limitations and Risks

The potential of G2P for mobile cash transfers is considerable, but challenges and constraints can limit their effectiveness. Enablers to strengthen the mobile G2P framework can help governments tackle challenges in establishing a mobile G2P payment program under pressure. Larger constraints and limits, however, warrant more attention. Some challenges are structural, such as inadequate infrastructure (including electricity and connectivity) and insufficient digital literacy, whereas others are inherent to digital technology for the transfer of value, such as cyber risks, fraud, and inadequate regulation.

Structural issues will take time and resources to address, yet cyber risks and digital fraud need to be tackled imminently. Policymakers and regulators should ensure that risks are identified, managed, and mitigated to the extent possible to build trust in G2P programs. The risks of accelerating mobile money, including cyber risks and digital fraud, must not outweigh the benefits. For example, most mobile transfers still rely on at least one bank for their custody or escrow account. Such transfers could thus be more sensitive to financial sector shocks if the MNO’s partner bank is affected. Conventional social assistance transfers, on the other hand, could be covered under the deposit insurance scheme, if applicable.

Countries may have a varying severity of challenges, from infrastructure development to available fiscal space, requiring different approaches and responses. Emerging market and developing economies with inadequate infrastructure, from electricity to payment rails, have relied on public-private partnerships with MNOs and fintech firms (for example, Interswitch in Nigeria).

Building Block 8 also presents the merits of interagency collaboration on digital connectivity initiatives for G2P programs. With increased deregulation and liberalization of the telecommunication market, countries have explored public-private partnerships, which have gained popularity across the world, particularly in emerging market and developing economies (PPP Knowledge Lab 2020). Such partnerships are significant, yet effective procurement policies and transparent project documentation mitigate the risks of working with the private sector, such as cost overruns and corruption.

Cybersecurity and Digital Fraud

Given the volume of funds and the sensitive nature of beneficiary data, cyberse-curity breaches are a risk for G2P platforms. Cybersecurity risks threaten the confidentiality, integrity, and availability of institutional data, applications, processes, and citizens’ information. For government agencies and institutions, leaks or misuse of beneficiary data or other consumer fraud could have serious reputational consequences and result in a durable loss of trust. Cybersecurity risks threaten both hardware and software in digital systems (and are often exacerbated during crises, such as the COVID-19 pandemic).

A thorough understanding of cybersecurity and digital fraud risks can help policymakers hold mobile G2P program stakeholders accountable for establishing a robust and secure G2P system. Each of the eight building blocks requires its own governance of cyber and digital fraud risks, from standard protection of infrastructure, applications, and networks to stronger information security. Sharing knowledge and collaborating through interagency information technology taskforces have allowed many low-income developing countries to achieve cyber-resilience objectives within a short time (Una, van Eden, and others 2020).

Likewise, stakeholders should develop business continuity plans to demonstrate shock responsiveness and guard against cyberattacks related to remote work (Leonovich 2020). These plans should identify core business processes and provide alternatives to sustain operations during emergencies.

Regulatory Concerns

A regulatory environment fostering G2P service providers’ participation should ensure consumer protection, financial integrity, and financial stability.

Many countries may not have adapted their regulatory and policy framework to allow nonfinancial service providers to participate in payment systems, because of financial integrity or data privacy issues. As discussed, the COVID-19 pandemic has prompted policymakers to reduce the regulatory compliance burden on mobile money issued by telecom or fintech firms. Mobile money customers are thus often not as protected by regulation as customers of regulated financial institutions.

Policymakers can protect financial integrity by remaining vigilant to emerging financial crime related to the pandemic while taking advantage of the flexibility provided by the FATF’s risk-based approach (FATF 2020a, 2020b). Flexibility is particularly relevant for countries that do not have reliable identity or socioeconomic data registries. The authorities should require that providers protect customer data, ensure services are easy to use, and comply with pertinent standards for AML/CFT.

In the long term, policymakers should aspire for international agreements on data privacy, cybersecurity, digital ID, cross-border digital currencies, and regulation (Sahay and others 2020). Ongoing collaboration among regulators and service providers enables continuous alignment on risk assessment and ensures a risk-based AML/CFT approach (Alliance for Financial Inclusion 2020). International collaboration and knowledge exchange are welcome developments. For example, INTERPOL has assisted African police in designing proactive strategies to combat organized crime, facilitate information exchange, and enhance investigative skills (INTERPOL 2020).

Conclusion

As the COVID-19 crisis unfolded, many emerging market and developing economies expanded mobile money platforms to provide income support at an unprecedented scale. Leveraging the high penetration of mobile phones and mobile accounts relative to banks’ access points, governments have expanded or introduced mobile money transfers to reach millions of workers and households that would have otherwise remained beyond reach, particularly in the informal economy.

Analyzing past country initiatives that built social safety nets around mobile transfers, as well as recent emergency responses, this chapter introduced a comprehensive framework to build sustainable G2P mobile programs. Using stylized facts from existing mobile cash transfer efforts and previous G2P and mobile payment initiatives in emerging market and developing economies, the chapter deduced the conditions for a successful G2P mobile program and any associated risks in the form of a comprehensive framework.

Divided into eight building blocks, this framework describes the ecosystem required to fully exploit the advantages of G2P mobile money transfers. The eight building blocks are designed to guide policymakers and regulators in iteratively adapting their countries’ regulatory environment, scaling up infrastructure, and choosing the right collaboration partners in support of G2P mobile transfers.

In the longer term, the framework can help policymakers develop stronger social protection systems and contribute to their strategic development goals. Together with other programs, mobile transfer platforms can strengthen social safety nets, allowing for adequate and effective coverage of vulnerable households and workers. Beyond safety nets, G2P mobile transfers can further contribute to inclusive growth by bringing financial accounts to the unbanked, empowering women financially, and helping small and medium enterprises grow within the formal sector. Mobile transfers can also increase the transparency and efficiency of public resource management.

Regardless of the maturity of a country’s mobile G2P infrastructure, any G2P solution will introduce risks and reveal constraints that need to be mitigated and managed. Risks will become even more prominent as digitalization progresses and countries introduce more sophisticated technologies into the digital cash ecosystem. Governments should remain cognizant of potential new risks that present themselves as their mobile cash transfer programs mature. Some risks, such as cybersecurity, require immediate attention, whereas others, such as regulation to protect data privacy or mitigate fraud and the violation of financial integrity standards, call for a concerted government effort over the medium term.

Annex 10.1. Enablers Maturity Map

This annex details enablers at each maturity stage across the eight building blocks of a mobile G2P framework. Policymakers can use this maturity map to identify where their countries are currently situated and evaluate options for developing the next evolution along each enabler. The framework is descriptive, not prescriptive; it provides guidance for countries to self-assess their current maturity stage but does not explicitly advise a course of action or decision.

^{Table 10.1.1.}

Beneficiaries

Source: Authors. Note: G2P = government to person; ID = identification; KYC = know your customer; MMO = mobile money operator; SIM = subscriber identification module; USSD = unstructured supplementary service data.

^{Table 10.1.1.}

Beneficiaries

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Eligibility Criteria
Broad eligibility criteria easy to identify, communicate, and implement.	Additional criteria, such as number of children in household and labor type, if available, allow more targeted transfer program.	Ability to include/exclude certain segments, for example, based on income level; articulation with other government benefit programs.
KYC Requirements
Any form of ID, even if not government issued (tax records, utility bills, health records). Authentication to access mobile wallet often uses personal ID numbers (often used in G2P programs).	Any standardized government ID, such as a voter card, birth certificate, or driver’s license. Accept MMOs’ KYC and authentication policies (for example, Brazil, Jordan) with certain limits.	National digital ID with streamlined, secure registration (for example, Aadhaar in India). Biometric authentication offers additional security. In Pakistan, biometrics promoted use of mobile wallets by women living in poverty.
User Experience
Most countries have maintained websites to answer questions. Messaging tools, such as WhatsApp in Kenya, have helped provide basic support service.	Countries have worked with MMOs and banks to offer user support. Mobile wallets typically use well-known USSD mobile wallet (Box 10.2).	Smartphones are able to provide superior mobile wallet experience, biometric authentication, and contactless payment. This should not, however, replace USSD, which remains the best option for hardest-to-reach populations.
Typical Risks to Mitigate
Financial exclusion from the inability to demonstrate identity. Forgery of ID documents.	Inconsistent data across sources. Identity theft.	Cyber crime.
Case Study
In 2011, the government of Uganda implemented a social cash transfer scheme called Social Assistance Grants for Empowerment (SAGE) to tackle chronic poverty. Two eligibility criteria were used: an index based on demographic indicators (for “vulnerable households,” which were low income and lacked labor capacity) and an index geared toward senior citizens, which strictly used age as a factor. The amount and frequency were the same for both: 25,000 Ugandan shillings (about US$10 at that time) per month paid every two months. Over the course of four years, the pilot program reached about 125,000 households and about 560,000 individuals. To register participants, information was gathered from households and entered in a database through a census-style registration system. Beneficiaries were provided a SAGE program card embedded with a SIM card from MTN, the country’s largest mobile network operator. Cardholders could withdraw funds at designated pay points after providing identification.

^{Table 10.1.1.}

Beneficiaries

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Eligibility Criteria
Broad eligibility criteria easy to identify, communicate, and implement.	Additional criteria, such as number of children in household and labor type, if available, allow more targeted transfer program.	Ability to include/exclude certain segments, for example, based on income level; articulation with other government benefit programs.
KYC Requirements
Any form of ID, even if not government issued (tax records, utility bills, health records). Authentication to access mobile wallet often uses personal ID numbers (often used in G2P programs).	Any standardized government ID, such as a voter card, birth certificate, or driver’s license. Accept MMOs’ KYC and authentication policies (for example, Brazil, Jordan) with certain limits.	National digital ID with streamlined, secure registration (for example, Aadhaar in India). Biometric authentication offers additional security. In Pakistan, biometrics promoted use of mobile wallets by women living in poverty.
User Experience
Most countries have maintained websites to answer questions. Messaging tools, such as WhatsApp in Kenya, have helped provide basic support service.	Countries have worked with MMOs and banks to offer user support. Mobile wallets typically use well-known USSD mobile wallet (Box 10.2).	Smartphones are able to provide superior mobile wallet experience, biometric authentication, and contactless payment. This should not, however, replace USSD, which remains the best option for hardest-to-reach populations.
Typical Risks to Mitigate
Financial exclusion from the inability to demonstrate identity. Forgery of ID documents.	Inconsistent data across sources. Identity theft.	Cyber crime.
Case Study
In 2011, the government of Uganda implemented a social cash transfer scheme called Social Assistance Grants for Empowerment (SAGE) to tackle chronic poverty. Two eligibility criteria were used: an index based on demographic indicators (for “vulnerable households,” which were low income and lacked labor capacity) and an index geared toward senior citizens, which strictly used age as a factor. The amount and frequency were the same for both: 25,000 Ugandan shillings (about US$10 at that time) per month paid every two months. Over the course of four years, the pilot program reached about 125,000 households and about 560,000 individuals. To register participants, information was gathered from households and entered in a database through a census-style registration system. Beneficiaries were provided a SAGE program card embedded with a SIM card from MTN, the country’s largest mobile network operator. Cardholders could withdraw funds at designated pay points after providing identification.

^{Table 10.1.2.}

Government Digital Tools

Source: Authors. Note: API = application programming interface; G2P = government to person; ID = identification; KYC = know your customer; MNO = mobile network operator; NGO = nongovernmental organization.

^{Table 10.1.2.}

Government Digital Tools

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Social Registry
Existing registries complemented with online self-registration and community-based ID of people in need (for example, local authorities).	Additional KYC requirements. Avoid duplicates and “ghosts” by leveraging other databases (for example, other benefit, programs, social security, tax administration, utilities, school, NGOs, and MNO databases).	Up-to-date and integrated socioeconomic data that allow fully automated validation of self-enrolled individuals by cross-checking reliable internal and external databases.
Standards and Open Architecture
Assuming data exist, some countries share program data (sometimes just an Excel file shared through secure channels) with government employees authorized to identify program recipients or to audit/manage risks.	G2P and beneficiary data are accessible programmatically and securely across public agencies and with external partners, such as MMOs, through APIs, boosting operational effectiveness and reducing human mistakes.	An open architecture supporting any G2P cash program is used securely, allowing the private sector, such as fintech, research agencies, and third parties to provide additional services. See also Box 10.1.
Streamlined Controls and Effective Procedures
Identify sources of inefficiencies and overcomplicated processes, procedures, and workflows that would delay G2P program.	Eliminate unnecessary steps, decisions, and intermediaries to improve G2P program delivery. Mitigate risks of such simplification with data collection and reporting from all framework participants.	Predictive analysis can improve performance (for example, identifying a population more likely to withdraw on a certain day to improve liquidity management) or reduce risks (for example, agent transaction patterns that flag suspicious activity) by suggesting actions to take.
Typical Risks to Mitigate
Some individuals may opt out to avoid paying taxes and risk being excluded. Corruption of intermediaries.	Inconsistent data across sources. Privacy breaches may reduce trust in G2P program. Some people may be missed; others may be paid more than once.	Cyber crime. Biased algorithms.
Case Study
In 2014, Catholic Relief Services began exploring more sophisticated electronic voucher systems for vulnerable populations in northeast Nigeria. The NGO had initially been using paper vouchers, but these were subject to fraud and duplication. In 2016, Catholic Relief launched its Cash and Assets Transfer Management Platform. This includes both back-end software, such as a web-based management system, Android-based apps for vendors or money agents, and data-analysis tools, as well as hardware, such as near-field communications technology, biometric scanners, and smart cards. Once field agents register beneficiaries (and their biometrics) on the platform, beneficiaries receive a smart card. The platform transfers roughly US $5 to US $6 cash to the smart card monthly. Dozens of local vendors accept the card (the implementing partner also recruits vendors). The program has supported roughly 83,000 beneficiaries and involved more than 180 vendors.

^{Table 10.1.2.}

Government Digital Tools

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Social Registry
Existing registries complemented with online self-registration and community-based ID of people in need (for example, local authorities).	Additional KYC requirements. Avoid duplicates and “ghosts” by leveraging other databases (for example, other benefit, programs, social security, tax administration, utilities, school, NGOs, and MNO databases).	Up-to-date and integrated socioeconomic data that allow fully automated validation of self-enrolled individuals by cross-checking reliable internal and external databases.
Standards and Open Architecture
Assuming data exist, some countries share program data (sometimes just an Excel file shared through secure channels) with government employees authorized to identify program recipients or to audit/manage risks.	G2P and beneficiary data are accessible programmatically and securely across public agencies and with external partners, such as MMOs, through APIs, boosting operational effectiveness and reducing human mistakes.	An open architecture supporting any G2P cash program is used securely, allowing the private sector, such as fintech, research agencies, and third parties to provide additional services. See also Box 10.1.
Streamlined Controls and Effective Procedures
Identify sources of inefficiencies and overcomplicated processes, procedures, and workflows that would delay G2P program.	Eliminate unnecessary steps, decisions, and intermediaries to improve G2P program delivery. Mitigate risks of such simplification with data collection and reporting from all framework participants.	Predictive analysis can improve performance (for example, identifying a population more likely to withdraw on a certain day to improve liquidity management) or reduce risks (for example, agent transaction patterns that flag suspicious activity) by suggesting actions to take.
Typical Risks to Mitigate
Some individuals may opt out to avoid paying taxes and risk being excluded. Corruption of intermediaries.	Inconsistent data across sources. Privacy breaches may reduce trust in G2P program. Some people may be missed; others may be paid more than once.	Cyber crime. Biased algorithms.
Case Study
In 2014, Catholic Relief Services began exploring more sophisticated electronic voucher systems for vulnerable populations in northeast Nigeria. The NGO had initially been using paper vouchers, but these were subject to fraud and duplication. In 2016, Catholic Relief launched its Cash and Assets Transfer Management Platform. This includes both back-end software, such as a web-based management system, Android-based apps for vendors or money agents, and data-analysis tools, as well as hardware, such as near-field communications technology, biometric scanners, and smart cards. Once field agents register beneficiaries (and their biometrics) on the platform, beneficiaries receive a smart card. The platform transfers roughly US $5 to US $6 cash to the smart card monthly. Dozens of local vendors accept the card (the implementing partner also recruits vendors). The program has supported roughly 83,000 beneficiaries and involved more than 180 vendors.

^{Table 10.1.3.}

Mobile Money Operators

Source: Authors. Note: API = application programming interface; G2P = government to person; KYC = know your customer; MMO = mobile money operator; QR = quick-response code; USSD = unstructured supplementary service data.

^¹In February 2020, Pakistan began distributing free smartphones and biometrically protected bank accounts to 7 million poor women (Find Biometrics 2020).

^{Table 10.1.3.}

Mobile Money Operators

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Quality of Service
Partnership with one MMO with proven ability to deliver mobile money to large segment of population. Account opening is straightforward and free.	Data about subscribers and use can be obtained from MMOs, preferably automatically through secure APIs. MMOs can provide additional financial services accessible with G2P money (for example, savings account).	Beneficiaries can select their MMOs, which are interoperable, allowing fund transfer between mobile wallets and with bank accounts.
Agent Network Coverage
Agents offer cash-out services in rural areas. They should have access to liquidity. They help first-time users navigate basic USSD menus.	Agents conduct basic KYC and offer account-opening services. Services available late and on weekends to flatten peak-hour crowd curves. Answer basic questions about G2P program on behalf of government.	Experienced and dense agent network is available in remote rural areas. Good liquidity management. Agents can answer more questions about the G2P program. MMOs can explain basic financial services, such as savings accounts.
Mobile Coverage
2G and 3G mobile coverage is available in majority of country.	Service is reliable and affordable.	Available to remote areas, such as mountainous regions, small islands, and low-density areas. Affordable or subsidized for poorest population.¹
Typical Risks to Mitigate
Populations hard to reach physically, economically, culturally (for example, women, older population) may not have access to digital payment. Inadequate regulatory rules.	Data privacy. Liquidity.	Financial and digital literacy may limit effectiveness of program.
Case Study
After a slower-than-expected uptake in the initial years, in 2010, Tanzania private telecom provider Tigo deployed a mobile wallet called Pesa to 12 million users (about half its base of voice and data subscribers), many of whom never had access to financial services before. Tigo Pesa’s success relies on compelling services for customers, real-time account activation, cash advance services (through a local bank), and international remittances to other MMOs in neighboring countries. Tigo offers user-friendly merchant payments using mobile money integrated with Mastercard’s Masterpass QR-based service. Tigo also counts more than 150,000 agents, many in rural areas, where it tends to dominate larger rival Vodacom. Agents are recruited on strict criteria, cross-referenced, provided financial education, and actively managed to ensure high-quality customer service. Tigo also works with multiple bank partners and “superagents” to ensure agent training; brand and marketing collateral; and liquidity services, including cash delivery. As of 2019, Tigo Pesa contributed nearly one-third of earnings for Tigo Tanzania, estimated at roughly $40 million.

^¹In February 2020, Pakistan began distributing free smartphones and biometrically protected bank accounts to 7 million poor women (Find Biometrics 2020).

^{Table 10.1.3.}

Mobile Money Operators

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Quality of Service
Partnership with one MMO with proven ability to deliver mobile money to large segment of population. Account opening is straightforward and free.	Data about subscribers and use can be obtained from MMOs, preferably automatically through secure APIs. MMOs can provide additional financial services accessible with G2P money (for example, savings account).	Beneficiaries can select their MMOs, which are interoperable, allowing fund transfer between mobile wallets and with bank accounts.
Agent Network Coverage
Agents offer cash-out services in rural areas. They should have access to liquidity. They help first-time users navigate basic USSD menus.	Agents conduct basic KYC and offer account-opening services. Services available late and on weekends to flatten peak-hour crowd curves. Answer basic questions about G2P program on behalf of government.	Experienced and dense agent network is available in remote rural areas. Good liquidity management. Agents can answer more questions about the G2P program. MMOs can explain basic financial services, such as savings accounts.
Mobile Coverage
2G and 3G mobile coverage is available in majority of country.	Service is reliable and affordable.	Available to remote areas, such as mountainous regions, small islands, and low-density areas. Affordable or subsidized for poorest population.¹
Typical Risks to Mitigate
Populations hard to reach physically, economically, culturally (for example, women, older population) may not have access to digital payment. Inadequate regulatory rules.	Data privacy. Liquidity.	Financial and digital literacy may limit effectiveness of program.
Case Study
After a slower-than-expected uptake in the initial years, in 2010, Tanzania private telecom provider Tigo deployed a mobile wallet called Pesa to 12 million users (about half its base of voice and data subscribers), many of whom never had access to financial services before. Tigo Pesa’s success relies on compelling services for customers, real-time account activation, cash advance services (through a local bank), and international remittances to other MMOs in neighboring countries. Tigo offers user-friendly merchant payments using mobile money integrated with Mastercard’s Masterpass QR-based service. Tigo also counts more than 150,000 agents, many in rural areas, where it tends to dominate larger rival Vodacom. Agents are recruited on strict criteria, cross-referenced, provided financial education, and actively managed to ensure high-quality customer service. Tigo also works with multiple bank partners and “superagents” to ensure agent training; brand and marketing collateral; and liquidity services, including cash delivery. As of 2019, Tigo Pesa contributed nearly one-third of earnings for Tigo Tanzania, estimated at roughly $40 million.

^¹In February 2020, Pakistan began distributing free smartphones and biometrically protected bank accounts to 7 million poor women (Find Biometrics 2020).

^{Table 10.1.4.}

Financial Institutions

Source: Authors. Note: AML/CFT/KYC = anti–money laundering/combating the financing of terrorism/know your customer; ATM = automated teller machine; COVID-19 = coronavirus disease 2019; G2P = government to person; MMO = mobile money operator; MNO = mobile network operator.

^{Table 10.1.4.}

Financial Institutions

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Branches and ATM Safety
Partnership banks must be capable of partnering with MNOs to provide mobile money. Banks should have reasonable ATM coverage in both urban and some rural areas and effective liquidity management. For all three phases represented in this table, social distancing should be mandated.	Branches are available in some rural areas and have flexible operating hours to prevent large crowds. G2P partnership is open to all banks in the country that comply with government criteria. Most operations other than cash out are done over the internet or telephone.	ATMs are functional, and liquidity and appointments are managed through predictive analytics and other automation technologies to prevent long lines. Personnel at branches are well trained and can provide customers with G2P and financial advice. Services are supported by interoperable platforms with MNOs.
Ease of Doing Business and Trust
Brand is recognized by many beneficiaries and is not distrusted (for example, does not have reputation for fraud). Trust is less an issue when beneficiaries interface with MMOs instead of banks.	Brand is recognized and trusted by most beneficiaries. Customers feel comfortable interacting with branch staff and obtaining information.	Brands of participating banks are strong; recognized by the majority of the population; and trusted to provide high-quality service, including internationally.
Risk Management
Participating bank adheres to basic internal controls, such as those meant to detect, prevent, and correct threats, particularly financial fraud.	Enhanced controls in place, such as best practices in accounting system access controls, standardized financial documentation, separation of duties, and reasonable AML/ CFT/KYC controls. For example, Peru improved its processes to avoid losing funds when cash is not withdrawn by the intended beneficiary or is not withdrawn at all (G2Px 2020c).	Robust internal controls in place, including frequent risk assessment and proactive risk monitoring (for example, early detection systems). Strong AML/CFT/KYC controls.
Typical Risks to Mitigate
Corruption, fraud. Liquidity. Waste of funds when beneficiary is deceased or doesn’t access account. Lack of experience in G2P mobile money management.	Difficulty to control compliance. Clear and quasi real-time reporting on G2P money flows.	Cyber readiness of banks’ technology, processes, and personnel.
Case Study
Several of Peru’s largest banks—Banco Crédito de Perú, BBVA, Scotiabank, and Interbank—created the ASBANC committee to promote a low-cost banking service for the unbanked and underserved population supported by an interoperable platform. Any bank is eligible to join ASBANC. Policymakers enabled nonbanks to issue electronic money in 2012, allowing for broader financial services participation. The fully interoperable national mobile money platform, called Billetera Móvil (BiM), is now supported by financial institutions, the government, and telecommunications companies to serve the unbanked and underbanked. The product allows any customer to open a paperless account on any mobile network with any one of the 34 member banks participating in the consortium. As of December 2019, BiM registered 1.3 million transactions per month, and the government is extending its COVID-19 stimulus through the platform to old and new beneficiaries (Rutkowski and others 2020).

^{Table 10.1.4.}

Financial Institutions

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Branches and ATM Safety
Partnership banks must be capable of partnering with MNOs to provide mobile money. Banks should have reasonable ATM coverage in both urban and some rural areas and effective liquidity management. For all three phases represented in this table, social distancing should be mandated.	Branches are available in some rural areas and have flexible operating hours to prevent large crowds. G2P partnership is open to all banks in the country that comply with government criteria. Most operations other than cash out are done over the internet or telephone.	ATMs are functional, and liquidity and appointments are managed through predictive analytics and other automation technologies to prevent long lines. Personnel at branches are well trained and can provide customers with G2P and financial advice. Services are supported by interoperable platforms with MNOs.
Ease of Doing Business and Trust
Brand is recognized by many beneficiaries and is not distrusted (for example, does not have reputation for fraud). Trust is less an issue when beneficiaries interface with MMOs instead of banks.	Brand is recognized and trusted by most beneficiaries. Customers feel comfortable interacting with branch staff and obtaining information.	Brands of participating banks are strong; recognized by the majority of the population; and trusted to provide high-quality service, including internationally.
Risk Management
Participating bank adheres to basic internal controls, such as those meant to detect, prevent, and correct threats, particularly financial fraud.	Enhanced controls in place, such as best practices in accounting system access controls, standardized financial documentation, separation of duties, and reasonable AML/ CFT/KYC controls. For example, Peru improved its processes to avoid losing funds when cash is not withdrawn by the intended beneficiary or is not withdrawn at all (G2Px 2020c).	Robust internal controls in place, including frequent risk assessment and proactive risk monitoring (for example, early detection systems). Strong AML/CFT/KYC controls.
Typical Risks to Mitigate
Corruption, fraud. Liquidity. Waste of funds when beneficiary is deceased or doesn’t access account. Lack of experience in G2P mobile money management.	Difficulty to control compliance. Clear and quasi real-time reporting on G2P money flows.	Cyber readiness of banks’ technology, processes, and personnel.
Case Study
Several of Peru’s largest banks—Banco Crédito de Perú, BBVA, Scotiabank, and Interbank—created the ASBANC committee to promote a low-cost banking service for the unbanked and underserved population supported by an interoperable platform. Any bank is eligible to join ASBANC. Policymakers enabled nonbanks to issue electronic money in 2012, allowing for broader financial services participation. The fully interoperable national mobile money platform, called Billetera Móvil (BiM), is now supported by financial institutions, the government, and telecommunications companies to serve the unbanked and underbanked. The product allows any customer to open a paperless account on any mobile network with any one of the 34 member banks participating in the consortium. As of December 2019, BiM registered 1.3 million transactions per month, and the government is extending its COVID-19 stimulus through the platform to old and new beneficiaries (Rutkowski and others 2020).

^{Table 10.1.5.}

Cash-Out Network

Source: Authors. Note: ATM = automated teller machine; G2P = government to person; SMS = short message service.

^{Table 10.1.5.}

Cash-Out Network

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Delivery Channel Mix
Most countries already have many channels of distribution (banks, ATMs, post offices, cash-out agents). At minimum, government-owned channels, such as local authorities and post offices, are staffed to cope with emergency disbursement.	Countries coordinate or regulate efforts across delivery channels to minimize long lines and better manage liquidity.	Large share of cashless economic transactions with people needing or wanting less and less cash to conduct everyday purchases/payments. Malaysia uses the popular GrabPay mobile wallet to transfer cash to citizens. A total of 70 percent pay GrabPay merchants without cashing out.
Liquidity Management
Financial institutions and government-owned channels maintain adequate cash reserves to meet demand for cash withdrawals.	Coordination across channels, communication to beneficiaries, and scheduling of time slots lower the risk of long lines and of liquidity problems (as in Peru).	Merchant acceptance of mobile money greatly reduces the need to cash out, which simplifies the issue of liquidity.
Trained Personnel
Countries have trained personnel at main access points to answer G2P program questions and provide basic redress mechanisms in case of disputes. Even in advanced economies, this can be difficult in times of crisis because of massive flows of applications and demands.	All personnel across participating channels are trained adequately. Internal controls are in place for government personnel who typically do not handle cash.	Well-designed products (including mobile apps, updated websites, and SMS alerts) limit the need for people to interact with cash-out personnel. Still, advanced and unscheduled internal controls limit bad service, fraud, or surcharges.
Typical Risks to Mitigate
Corruption. Manual mistakes. Subpar services. Liquidity.	Liquidity. Unregulated access to cash-out point.	Low digital literacy may limit the effectiveness of some technology solutions.
Case Study
In Colombia, private bank Banco Davivienda created the DaviPlata mobile platform in 2011 in response to a government call to cost-effectively disburse money to lower-income households. An essential component for success was sufficient cash-out points managed by the parent bank. To complement its 600 branches and 1,600-ATM network, Banco Davivienda leveraged 5,000 store access points (2.5 times more access points than its direct channels). Moreover, this growth specifically targeted underserved communities; within three years, banking agents covered more than 700 new municipalities that were previously not served by the branches and ATMs, demonstrating that mixed channels of delivery are essential (Consultores 2015).

Source: Authors. Note: ATM = automated teller machine; G2P = government to person; SMS = short message service.

^{Table 10.1.5.}

Cash-Out Network

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Delivery Channel Mix
Most countries already have many channels of distribution (banks, ATMs, post offices, cash-out agents). At minimum, government-owned channels, such as local authorities and post offices, are staffed to cope with emergency disbursement.	Countries coordinate or regulate efforts across delivery channels to minimize long lines and better manage liquidity.	Large share of cashless economic transactions with people needing or wanting less and less cash to conduct everyday purchases/payments. Malaysia uses the popular GrabPay mobile wallet to transfer cash to citizens. A total of 70 percent pay GrabPay merchants without cashing out.
Liquidity Management
Financial institutions and government-owned channels maintain adequate cash reserves to meet demand for cash withdrawals.	Coordination across channels, communication to beneficiaries, and scheduling of time slots lower the risk of long lines and of liquidity problems (as in Peru).	Merchant acceptance of mobile money greatly reduces the need to cash out, which simplifies the issue of liquidity.
Trained Personnel
Countries have trained personnel at main access points to answer G2P program questions and provide basic redress mechanisms in case of disputes. Even in advanced economies, this can be difficult in times of crisis because of massive flows of applications and demands.	All personnel across participating channels are trained adequately. Internal controls are in place for government personnel who typically do not handle cash.	Well-designed products (including mobile apps, updated websites, and SMS alerts) limit the need for people to interact with cash-out personnel. Still, advanced and unscheduled internal controls limit bad service, fraud, or surcharges.
Typical Risks to Mitigate
Corruption. Manual mistakes. Subpar services. Liquidity.	Liquidity. Unregulated access to cash-out point.	Low digital literacy may limit the effectiveness of some technology solutions.
Case Study
In Colombia, private bank Banco Davivienda created the DaviPlata mobile platform in 2011 in response to a government call to cost-effectively disburse money to lower-income households. An essential component for success was sufficient cash-out points managed by the parent bank. To complement its 600 branches and 1,600-ATM network, Banco Davivienda leveraged 5,000 store access points (2.5 times more access points than its direct channels). Moreover, this growth specifically targeted underserved communities; within three years, banking agents covered more than 700 new municipalities that were previously not served by the branches and ATMs, demonstrating that mixed channels of delivery are essential (Consultores 2015).

Source: Authors. Note: ATM = automated teller machine; G2P = government to person; SMS = short message service.

^{Table 10.1.6.}

Payment Acceptance Network

Source: Authors. Note: B2B = business to business; B2G = business to government; MNO = mobile network operator; P2B = person to business; QR = quick-response code; P2G = person to government; USSD = unstructured supplementary service data.

^{Table 10.1.6.}

Payment Acceptance Network

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Mobile Money Life Cycle
Some “essential” businesses, such as those providing water, electricity, food (grocery), and medicine (pharmacy), are registered as merchants and accept mobile money to provide P2B services.	Wider merchant acceptance. Some government services also accept mobile money to introduce P2G payment (for example, taxes, public transportation, schools).	Most micro and small businesses, including informal ones, are registered. These include local market vendors, taxi drivers, bars and restaurants, and (small) convenience stores. Businesses can use the same platforms to transact among themselves (B2B) and with the government (B2G).
Fee Structure
For essential services, countries have waived fees for registration and transactions and lowered charges for “essential” merchants, for a fixed period.	Countries have waived charges for customers and lowered or waived fees for small-value transactions (for example, under US $10) across a wide range of merchants for a fixed period.	Fees are applied more strategically to aim for specific, localized goals (for example, Kenya applied tier fees to encourage MNOs to provide services in underserved regions). Taxation of mobile transactions should aim to avoid creating arbitrage (Global System for Mobile Communications Association 2020b).
Payment Platforms and Interoperability
A merchant registered under a certain mobile money plan can accept payments from a beneficiary from any other mobile money plan (that is, one-to-many plan).	A merchant registered under any mobile money plan can accept beneficiary payments from any other mobile money plan (that is, many-to-many plan).	A merchant registered under any payment plan (mobile money or bank) can accept beneficiary payments from any other payment plan (that is, many-to-many and across plans).
Case Study
In June 2018, Econet Wireless, Zimbabwe’s leading mobile operator, launched a merchant payment business through its mobile money platform, EcoCash. Because of persistent shortages of physical cash in the country, Zimbabwe’s central bank has strongly promoted moving toward a cash-lite economy. The EcoCash Business Wallet is a separate mobile money wallet for businesses that is covered by insurance and allows larger transaction limit amounts compared to an individual wallet (roughly two to three times larger, depending on the size of business). All businesses, both formal and informal, are eligible, and additional services include payroll services and supplier payments. Customers would dial a separate USSD shortcode to access the service, which allows it to work on a 2G handset. EcoNet has also developed a smartphone app to serve the growing population with smartphone devices. EcoCash is not currently interoperable with other mobile money plans (although EcoNet owns most of the mobile money market). EcoNet also enabled consumers to pay with card-based schemes through Mastercard’s Masterpass QR services, available at roughly 3,800 merchants, with either their smartphones or feature phones. However, EcoCash has not yet been integrated with bank-based point-of-sale terminals.

^{Table 10.1.6.}

Payment Acceptance Network

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Mobile Money Life Cycle
Some “essential” businesses, such as those providing water, electricity, food (grocery), and medicine (pharmacy), are registered as merchants and accept mobile money to provide P2B services.	Wider merchant acceptance. Some government services also accept mobile money to introduce P2G payment (for example, taxes, public transportation, schools).	Most micro and small businesses, including informal ones, are registered. These include local market vendors, taxi drivers, bars and restaurants, and (small) convenience stores. Businesses can use the same platforms to transact among themselves (B2B) and with the government (B2G).
Fee Structure
For essential services, countries have waived fees for registration and transactions and lowered charges for “essential” merchants, for a fixed period.	Countries have waived charges for customers and lowered or waived fees for small-value transactions (for example, under US $10) across a wide range of merchants for a fixed period.	Fees are applied more strategically to aim for specific, localized goals (for example, Kenya applied tier fees to encourage MNOs to provide services in underserved regions). Taxation of mobile transactions should aim to avoid creating arbitrage (Global System for Mobile Communications Association 2020b).
Payment Platforms and Interoperability
A merchant registered under a certain mobile money plan can accept payments from a beneficiary from any other mobile money plan (that is, one-to-many plan).	A merchant registered under any mobile money plan can accept beneficiary payments from any other mobile money plan (that is, many-to-many plan).	A merchant registered under any payment plan (mobile money or bank) can accept beneficiary payments from any other payment plan (that is, many-to-many and across plans).
Case Study
In June 2018, Econet Wireless, Zimbabwe’s leading mobile operator, launched a merchant payment business through its mobile money platform, EcoCash. Because of persistent shortages of physical cash in the country, Zimbabwe’s central bank has strongly promoted moving toward a cash-lite economy. The EcoCash Business Wallet is a separate mobile money wallet for businesses that is covered by insurance and allows larger transaction limit amounts compared to an individual wallet (roughly two to three times larger, depending on the size of business). All businesses, both formal and informal, are eligible, and additional services include payroll services and supplier payments. Customers would dial a separate USSD shortcode to access the service, which allows it to work on a 2G handset. EcoNet has also developed a smartphone app to serve the growing population with smartphone devices. EcoCash is not currently interoperable with other mobile money plans (although EcoNet owns most of the mobile money market). EcoNet also enabled consumers to pay with card-based schemes through Mastercard’s Masterpass QR services, available at roughly 3,800 merchants, with either their smartphones or feature phones. However, EcoCash has not yet been integrated with bank-based point-of-sale terminals.

^{Table 10.1.7.}

Business Model Elements

Source: Authors. Note: COVID-19 = coronavirus disease 2019; CFAF = CFA franc; G2P = government to person; ID = identification; KYC = know your customer; MNO = mobile network operator; USSD = unstructured supplementary service data.

^{Table 10.1.7.}

Business Model Elements

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Program Features
Some countries have opted for a minimal one-time, unconditional electronic transfer for easily identifiable beneficiary segments.	In many cases, transfer amounts are fixed and occur with a set frequency and last over a defined period.	Transfer amounts vary by beneficiary segment (for example, employment type, gender, age) using up-to-date data. Duration is tied to measurable effects and market conditions. Crisis context is supported by trustable data.
Effective and Frequent Communication
Countries usually document features through their websites and media: beneficiary eligibility; documents and requirements (including conditions); transfer amount and frequency; and how, where, and how quickly funds are transferred.	Additional financial education and marketing collateral developed, including at cash-out access points. Basic customer support by USSD to check balances and most recent transactions.	Marketing and customer support are available in local languages of the beneficiaries and local authorities. Extensive customer support to address customer queries and resolve disputes.
Program Management
Ensure basic processes, procedures, and reporting along financial, operations, and technology functions are in place across all stakeholders: government, bank, MNO, and any intermediaries (such as technology vendors or marketing agencies) for effective transfer.	Consider tactics for effectiveness of programs and risk reduction (for example, vetting stakeholders, ensuring sufficient liquidity in specific areas of country). Develop and control deadlines and budgets.	To optimize performance, continuously align objectives of stakeholders, frequently share operational data and best practices, recommend adjustments in business model elements, and proactively identify and mitigate risks to program.
Case Study
In 2019, Togo began its digital National ID program for Togolese citizens and noncitizen residents. National ID includes even those who do not have birth certificates. After the program obtains biometrics to ensure that each individual is counted only once, a card is provided as proof of ID that enables people to apply for all government and financial services, among others. Furthermore, the Togolese government is also establishing “e-KYC” to facilitate the ability for public and private sector entities to verify identity digitally, rather than rely on verification of a physical document by personnel. At the core is a central registry that holds the data of Togo’s 7 million plus citizens and residents. In response to COVID-19, the government launched a G2P program called Novissi. The core product features include a monthly transfer of 10,500 CFAF (about US $18) for men and 12,250 CFAF (about US $21) for women, and close to US $35 for motorbike taxi drivers. The Togolese government has also communicated clear eligibility requirements (for example, being 18 years of age; both citizens and residents are eligible) and ID requirements (for example, a voter card is sufficient) and has encouraged beneficiaries to make payments electronically where possible. Registration is by simple USSD code across all networks (*#855) and, conveniently, is the same toll-free number for general customer inquiries (855), making it easier for beneficiaries to remember.

^{Table 10.1.7.}

Business Model Elements

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Program Features
Some countries have opted for a minimal one-time, unconditional electronic transfer for easily identifiable beneficiary segments.	In many cases, transfer amounts are fixed and occur with a set frequency and last over a defined period.	Transfer amounts vary by beneficiary segment (for example, employment type, gender, age) using up-to-date data. Duration is tied to measurable effects and market conditions. Crisis context is supported by trustable data.
Effective and Frequent Communication
Countries usually document features through their websites and media: beneficiary eligibility; documents and requirements (including conditions); transfer amount and frequency; and how, where, and how quickly funds are transferred.	Additional financial education and marketing collateral developed, including at cash-out access points. Basic customer support by USSD to check balances and most recent transactions.	Marketing and customer support are available in local languages of the beneficiaries and local authorities. Extensive customer support to address customer queries and resolve disputes.
Program Management
Ensure basic processes, procedures, and reporting along financial, operations, and technology functions are in place across all stakeholders: government, bank, MNO, and any intermediaries (such as technology vendors or marketing agencies) for effective transfer.	Consider tactics for effectiveness of programs and risk reduction (for example, vetting stakeholders, ensuring sufficient liquidity in specific areas of country). Develop and control deadlines and budgets.	To optimize performance, continuously align objectives of stakeholders, frequently share operational data and best practices, recommend adjustments in business model elements, and proactively identify and mitigate risks to program.
Case Study
In 2019, Togo began its digital National ID program for Togolese citizens and noncitizen residents. National ID includes even those who do not have birth certificates. After the program obtains biometrics to ensure that each individual is counted only once, a card is provided as proof of ID that enables people to apply for all government and financial services, among others. Furthermore, the Togolese government is also establishing “e-KYC” to facilitate the ability for public and private sector entities to verify identity digitally, rather than rely on verification of a physical document by personnel. At the core is a central registry that holds the data of Togo’s 7 million plus citizens and residents. In response to COVID-19, the government launched a G2P program called Novissi. The core product features include a monthly transfer of 10,500 CFAF (about US $18) for men and 12,250 CFAF (about US $21) for women, and close to US $35 for motorbike taxi drivers. The Togolese government has also communicated clear eligibility requirements (for example, being 18 years of age; both citizens and residents are eligible) and ID requirements (for example, a voter card is sufficient) and has encouraged beneficiaries to make payments electronically where possible. Registration is by simple USSD code across all networks (*#855) and, conveniently, is the same toll-free number for general customer inquiries (855), making it easier for beneficiaries to remember.

Digital Inclusion Foundations

The three enablers in Table 10.1.8 are out of reach and out of scope for a G2P program. However, close coordination with stakeholders will help countries further define and prioritize the business model (Building Block 7) and digital inclusion (Building Block 8), as well as coordinate work with other government agencies to maximize the effect of mobile G2P payments and boost the effect of mobile platforms beyond G2P (see the end-to-end framework section).

^{Table 10.1.8.}

Digital Inclusion Foundations

Source: Authors. Note: G2P = government to person; MMO = mobile money operator.

^{Table 10.1.8.}

Digital Inclusion Foundations

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Digital Access and Affordability
Working with MMO data and government agencies in charge of infrastructure and digital inclusion, G2P program managers identify where mobile G2P can and cannot be implemented in the short term and adapt the program accordingly.	Many countries rapidly mandated that internet and energy providers ensure availability and affordability of services during the pandemic (Argentina, Chile, Malaysia, Panama, Qatar, Vietnam).	All countries suffer from some domestic digital divide because of affordability, internet and electricity coverage, or education. See the Enhanced Digital Access Index (Alper and Miktus 2019) as an example of the tools available to measure and reduce digital divide.
Gender Gap
Stakeholders should assess the possible negative effect of digital payment for women in emerging market and developing economies, given that they represent a large portion of the informal sector, and the digital divide between genders has been widening in the past seven years (International Telecommunications Union 2019). Also, at a minimum, countries should collect gender-disaggregated information on the G2P program for future improvement.	Programs designed to address gender gaps can have long-term benefits for women’s empowerment (G2Px 2020d). In Pakistan and Togo, mobile G2P has explicitly targeted impoverished women.	The Digitize, Direct, Design Framework from Chamberlin and others (2019) can guide the design of mobile G2P for women’s economic empowerment.
Typical Risks to Mitigate
Digital exclusion of the population hardest to reach physically and economically. Digital exclusion of populations with low literacy. Gender gap in financial access.

Source: Authors. Note: G2P = government to person; MMO = mobile money operator.

^{Table 10.1.8.}

Digital Inclusion Foundations

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Digital Access and Affordability
Working with MMO data and government agencies in charge of infrastructure and digital inclusion, G2P program managers identify where mobile G2P can and cannot be implemented in the short term and adapt the program accordingly.	Many countries rapidly mandated that internet and energy providers ensure availability and affordability of services during the pandemic (Argentina, Chile, Malaysia, Panama, Qatar, Vietnam).	All countries suffer from some domestic digital divide because of affordability, internet and electricity coverage, or education. See the Enhanced Digital Access Index (Alper and Miktus 2019) as an example of the tools available to measure and reduce digital divide.
Gender Gap
Stakeholders should assess the possible negative effect of digital payment for women in emerging market and developing economies, given that they represent a large portion of the informal sector, and the digital divide between genders has been widening in the past seven years (International Telecommunications Union 2019). Also, at a minimum, countries should collect gender-disaggregated information on the G2P program for future improvement.	Programs designed to address gender gaps can have long-term benefits for women’s empowerment (G2Px 2020d). In Pakistan and Togo, mobile G2P has explicitly targeted impoverished women.	The Digitize, Direct, Design Framework from Chamberlin and others (2019) can guide the design of mobile G2P for women’s economic empowerment.
Typical Risks to Mitigate
Digital exclusion of the population hardest to reach physically and economically. Digital exclusion of populations with low literacy. Gender gap in financial access.

Source: Authors. Note: G2P = government to person; MMO = mobile money operator.

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For a comparison of the magnitude of fiscal support in selected countries between the COVID-19 crisis and the global financial crisis, see Cassim and others (2020).

In countries with high prevalence of informality (Ayana Aga, Jolevski, and Muzi 2020), an informal business is often the sole source of income for the owner’s family, with about 45 percent of businesses making $2 or less per day.

Advanced economies also face challenges in providing timely and adequate support for workers and households, particularly gig workers, the self-employed, and independent contractors. Insufficient administrative capacity and complex enrollment processes have delayed the fulfillment of massive simultaneous requests for unemployment and social assistance benefits. For example, in March 2020, the UK Department for Work and Pensions had moved about 9,000 staff to deal with claims and was recruiting more to reduce delays in identification (ID) verification (the UK Secretary of State for the Department for Work and Pensions’ oral statement to Parliament on May 4, 2020) and process the 950,000 applications received in one week, compared to a normal flow of about 100,000 applicants in any given two-week period.

The Philippines is developing its national digital ID, starting with 5 million individuals. Because bank coverage is limited, the country will need low-cost touchpoints, such as bank agents, to implement the system.

According to the Global System for Mobile Communications Association (2020a), global averages per 100,000 adults are 11 banks and 33 ATMs, compared to 228 mobile money agents (the small retailers where customers can deposit to or withdraw cash from mobile accounts, buy phone airtime cards, and so on).

World Bank survey data for nine cities in four African countries (Mozambique, Somalia, Zambia, and Zimbabwe) show that between 20 percent (in Nampula, Mozambique) and 82 percent (in Mogadishu, Somalia) of informal businesses use mobile money in their operations. In Mozambique, as measured by the World Bank’s Global Findex, twice as many informal business owners use mobile money as the average population.

The Financial Action Task Force (FATF) recently promoted a simplifed, risk-based approach to using “trustworthy digital identity for . . . identifying people remotely for both onboarding and conducting transactions” (FATF 2020b).

For a discussion on the importance of digital solutions for public finance management, see Una, Allen, and others (2020) and Una, van Eden, and others (2020).

For example, built-in triggers that can adapt a program to an emergency context to ensure delivery continuity, such as transforming free school-meal programs into cash transfers for the family or in-house food distribution.

For example, in Namibia, the government implemented a new monetary transfer for all adult informal workers and the unemployed, explicitly excluding formal workers and recipients of existing social protection programs. In one week, 579,000 SMS applications were received out of 739,000 adults expected to be eligible (Seekings and Gronbach 2020).

In 2015–16, during the Ebola crisis, only 7 percent of all unconditional cash transfers implemented to provide lifeline supports in Liberia and Sierra Leone were mobile transfers, despite the overwhelming incentive to use digital rather than cash distribution to contain the virus (Dumas, Frisetti, and Radice 2017). A largely inadequate mobile ecosystem—weak infrastructure, lack of awareness among potential beneficiaries, and operational challenges—prevented the use of mobile transfers at scale.

The framework builds on the work of many organizations, including the Global System for Mobile Communications Association, the Alliance for Financial Inclusion, and several World Bank initiatives, such as the Consultative Group to Assist the Poor and the World Bank and Gates Association’s G2Px. The framework also incorporates the authors’ original research in association with Digital Disruptions, a consulting company.

For example, in Nigeria, the authorities collaborated with MNOs to identify vulnerable informal workers in urban areas through their purchase pattern of airtime. In addition to MMO data, other “proxy registries” can be leveraged to identify workers in the informal economy, such as company and individual member registries held by informal business unions or associations, utility bills, invoices of sales by wholesalers, and local governments’ registries of poor households and local informal businesses.

A mobile wallet is either a mobile app or a code to access a remote application through SMS or unstructured supplementary service data (see Box 10.2).

Roessler and others (2019) show that in Tanzania, providing women with free phones improved financial access. However, the women still preferred cash to mobile money for all transactions other than remittances. Acceptance of mobile money was higher for literate participants, highlighting the need for clear and simple communication (Building Block 7).

Although the fee structure of the indirect channels is not treated in this building block, stakeholders should remain aware of its importance. More information on fee structure is provided in Building Block 6.

The reduction and elimination of charges has taken many forms, from central banks eliminating transaction taxes for person-to-person mobile transfers or taxes paid by merchants on mobile money transactions, to MMOs agreeing to temporarily reduce their charges.

In 2018, a new tax on mobile transactions in Uganda led to street protests. The tax was seen as overwhelmingly affecting the poorest people in the country, who do not have access to banks. Within a few months, P2P values fell by more than 50 percent in favor of cash.

The GSMA Mobile Money application programming interface and Gates Foundation’s Mojaloop, described in Box 10.1, are often seen as foundational projects for the future of interoperable payment in developing countries (Martins 2020).

The Togolese government frequently updates all data on Novissi on its website: https://novissi.gouv.tg/en/.

On average, women are 10 percent less likely to own a mobile phone (GSMA 2020a), with affordability being the most significant barrier to ownership (Lindsey and Wilson 2019).

In March 2020, South Africa allowed the TV white space spectrum to roll out affordable or free data services, particularly in rural and remote areas (Independent Communications Authority of South Africa 2020).

This enabler can benefit from the work of Zimmerman and others (2020) and other actors who promote the Digitize, Direct, Design Framework to enhance women’s economic empowerment through cash transfers.

Contributor Notes

In this chapter, mobile money is defined as a digital medium of exchange and store of value using mobile money accounts, which are typically offered by a mobile network operator (MNO) or another entity in partnership with an MNO (Chhabra and Das 2019). Mobile money transfers have been instrumental in enabling governments to reach large swaths of population in need of income support during the COVID-19 pandemic, such as workers in the informal economy largely uncovered by existing safety nets. This chapter presents a comprehensive framework for including mobile money solutions in support of strengthened and sustainable social safety nets (Davidovic and others 2020).

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The Global Informal Workforce

Priorities for Inclusive Growth

Author:

International Monetary Fund

ISBN:: 9781513575919

Publication Date:: 23 Jul 2021

Publisher:: International Monetary Fund

DOI:: https://doi.org/10.5089/9781513575919.071

Pages:: 412

Abstract
Background
An End-TO-End Framework to Guide Evolution of Mobile G2P Payments
Limitations and Risks
- Cybersecurity and Digital Fraud
- Regulatory Concerns
Conclusion
Annex 10.1. Enablers Maturity Map
- Digital Inclusion Foundations
References

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^{Figure 10.1.}

Existing, Additional, and Total Population Coverage of Monetary Transfers During COVID-19

(Percent of total population)

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^{Figure 10.2.}

Population in Need of Support after a COVID-19–Type Shock

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^{Figure 10.3.}

Coverage of Social Assistance Programs and Share of Informal Economy, by Income Group and Region

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^{Figure 10.4.}

Basic Trinity of Population Reachability

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^{Figure 10.5.}

Coverage of Financial Account, Mobile Phone Ownership, and Mobile Money Account, by Region, 2019

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^{Figure 10.6.}

Eight Building Blocks for a Sustainable Mobile G2P Framework

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^{Figure 10.7.}

How G2P Mobile Cash Typically Flows from Government to the Unbanked and Other Participants

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^{Figure 10.8.}

The Eight Building Blocks Rely on Key “Enablers” That Support Various Degrees of the Mobile Ecosystem’s Maturity

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^{Figure 10.9.}

Designing the Mobile G2P Program around the Beneficiaries

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^{Box Figure 10.2.1.}

Process for User to Send Payment through a USSD Mobile Wallet

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^{Figure 10.10.}

Progress in Digital Access in Sub-Saharan Africa Remains Hindered by High Costs and Lags in Remote Areas

(Enhanced Digital Access Index score)

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^{Figure 10.11.}

The Internet User Gender Gap in Emerging Markets and Developing Economies, 2013–19

(Percent)

Foresee

^{Table 10.1.8.}

Digital Inclusion Foundations

Minimum Required	Good to Have (Enhanced Scenario)	Great to Have (Advanced Model)
Digital Access and Affordability
Working with MMO data and government agencies in charge of infrastructure and digital inclusion, G2P program managers identify where mobile G2P can and cannot be implemented in the short term and adapt the program accordingly.	Many countries rapidly mandated that internet and energy providers ensure availability and affordability of services during the pandemic (Argentina, Chile, Malaysia, Panama, Qatar, Vietnam).	All countries suffer from some domestic digital divide because of affordability, internet and electricity coverage, or education. See the Enhanced Digital Access Index (Alper and Miktus 2019) as an example of the tools available to measure and reduce digital divide.
Gender Gap
Stakeholders should assess the possible negative effect of digital payment for women in emerging market and developing economies, given that they represent a large portion of the informal sector, and the digital divide between genders has been widening in the past seven years (International Telecommunications Union 2019). Also, at a minimum, countries should collect gender-disaggregated information on the G2P program for future improvement.	Programs designed to address gender gaps can have long-term benefits for women’s empowerment (G2Px 2020d). In Pakistan and Togo, mobile G2P has explicitly targeted impoverished women.	The Digitize, Direct, Design Framework from Chamberlin and others (2019) can guide the design of mobile G2P for women’s economic empowerment.
Typical Risks to Mitigate
Digital exclusion of the population hardest to reach physically and economically. Digital exclusion of populations with low literacy. Gender gap in financial access.

Source: Authors. Note: G2P = government to person; MMO = mobile money operator.

Topics

Countries

Series

About

Resources

Abstract

Background

Government-to-Person Social Transfers during an Unprecedented Crisis

The Importance of Basic Delivery Components

Strong G2P Mobile Transfers for Strong Social Protection Systems

An End-TO-End Framework to Guide Evolution of Mobile G2P Payments

Building Block 1: Beneficiaries

Eligibility Criteria

KYC Requirements

User Experience

Building Block 2: Digital Government

Social Registry

Standards and Open Architecture

Streamlined Controls and Effective Procedures

Building Block 3: Mobile Money Operators

Quality of Service

Agent Network Coverage

Mobile Coverage

Mobile Money Regulatory Requirements

Building Block 4: Financial Institutions

Branches and ATM Safety

Ease of Doing Business and Trust

Risk Management

Building Block 5: Cash-Out Network

Delivery Channel Mix

Liquidity Management

Trained Personnel

Building Block 6: Payment Acceptance Network

Mobile Money Life Cycle

Fee Structure

Payment Platforms and Interoperability

Building Block 7: Business Model Elements

Program Features

Effective and Frequent Communication

Program Management

Building Block 8: Digital Inclusion Foundations

Digital Access and Afordability

Gender Gap

Limitations and Risks

Cybersecurity and Digital Fraud

Regulatory Concerns

Conclusion

Annex 10.1. Enablers Maturity Map

Digital Inclusion Foundations

References

Within Same Series

Other IMF Content

Other Publishers Content

Asian Development Bank

Food and Agriculture Organization

Inter-American Development Bank

The World Bank

Contributor Notes

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Table of Contents

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Foresee