This report offers guidance on assessing the different options for cash delivery. It also explores the potential for stronger partnerships with private sector providers and looks at developments in the payments industry. It argues that context-specific analysis is vital, as well as the integration of cash approaches into contingency planning. Clearly defined programme objectives help to guide the choice of payment systems.
International aid agencies and governments are increasingly using cash as a mechanism to provide relief to people after disasters. New technologies in the banking industry now offer different options for making payments and delivering banking services. However, the use of cash, as opposed to ‘in kind’ assistance, is still a new approach and aid agencies are at the early stages of developing guidelines, policies and organisational capacity to implement cash projects.
It has taken agencies a long time to get cash projects up and running, in part because the systems are often not in place to deliver cash quickly. Cash provision has not been included in contingency planning. Agencies do not have private sector cash providers to the extent that they have providers of in-kind goods such as food and tents.
Before undertaking a cash-based relief project, agencies need to remember that transferring cash to people in insecure and remote environments is particularly difficult and expensive. They also need to be aware of the extent of delivery options as well as the range of possible agents and their potential motivations:
- Delivery agents include governments, aid agencies, banks, post offices, mobile phone companies, micro-finance companies, security companies and local traders.
- Delivery methods include: cash in envelopes, delivery through banking systems and delivery using smart cards, debit cards, prepaid cards and mobile phone technologies.
- Different providers have different interests in delivering cash to people in emergency settings, including revenue generation, financial sustainability, reputation, marketing and public sector motivations.
Cash delivery mechanisms should be designed to be operated on a large-scale if needed and to be flexible enough to vary the levels and frequency of payments. They also need to be resilient enough to continue providing cash during the disruption caused by emergencies, including physical damage after natural disasters and insecurity in conflicts. Aid agencies should:
- Take forward discussions with the private sector within concrete national and regional contingency planning processes.
- Recognise and respect the interests and motives of different partners.
- Weigh the costs and benefits of different delivery options using clear criteria and from the perspective of both the delivering agent and the recipient.
- Review potential providers in anticipation of disasters, meeting with each to gauge their interest and to get an overview of services, likely costs and possible contract terms.
- Engage with global players such as banks, card associations, remittance agencies and payments technology providers to formulate a solution that could be implemented and replicated in multiple countries with multiple local partners.
- Cater for vulnerable groups within the recipient group when choosing and designing a cash delivery system.
See also Harvey, P. and Bailey, S., 2011, ‘Good Practice Review: Cash Transfer Programming in Emergencies’, Humanitarian Practice Network, ODI, London.
