## Appendix 1: Key Enablers Maturity Map (wpiea2020198-print-pdf) ## Source details **Canonical URL:** [Appendix 1: Key Enablers Maturity Map (wpiea2020198-print-pdf)](https://www.imf.org/-/media/files/publications/wp/2020/english/wpiea2020198-print-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/wp/2020/english/wpiea2020198-print-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/wp/2020/english/wpiea2020198-print-pdf.pdf.json) --- ### Background: Scaling Up G2P Social Transfers During COVID-19 - On average, countries have spent an additional 1 percent of GDP to flex up pre-existing social programs—insurance, assistance and labor market-related—and introduced new ones. - Additional fiscal outlays have mainly financed the expansion of social assistance systems to cover over 1.8 billion people worldwide (Gentilini et al. 2020). - Governments most often chose G2P monetary transfers, representing about 51 percent of all social measures planned and/or implemented, with a population coverage that has more than doubled to 38 percent on average over 5 months. - Rapid expansion risks: duplication, high administrative costs, undermining well-functioning social programs if improperly repurposed (example: Philippines Emergency Subsidy Program linked to Pamilyang Pilipino Program created social discontent). - Countries that invested in scalable and shock-responsive social safety nets are better positioned for COVID-type crises. ### Key Findings on Population Vulnerability and System Gaps - The pandemic generates large negative income shocks across the board and proportionately more so at the bottom half of the income distribution and among informal business owners. - Many EMDEs face weak and patchy social protection systems and often lack crucial information to expand them effectively. - Informality compounds targeting difficulties because verifiable employment and income data are typically available only for formally registered workers. - Representative statistics and observations: - Over 1.8 billion people covered by expanded social assistance (Gentilini et al. 2020). - Population coverage of monetary transfers rose to 38 percent on average over 5 months. - In countries with very high prevalence of informality, about 45 percent of informal businesses make USD 2 or less per day (Ayana Aga, Jolevski, Muzi. 2020). ### The Basic Delivery Trinity and Typical Operational Flow for Mobile G2P - Three integrated core elements for broad and adequate income support: - A universal identification (ID) system. - Socioeconomic data on households (social registries). - A mode of benefit delivery (digital or analog). - Typical G2P mobile cash operational flow: - 1. The government selects one or multiple mobile money operators (MMOs) such as mobile network operators (MNOs, e.g., Orange), commercial banks, or fintech firms, which offer mobile money in the country; - 2. Existing national databases or MMO data are used to select applicants who meet the program’s eligibility criteria; - 3. The government wires the money to the bank partnering with the MMOs and shares the identity of eligible recipients; - 4. Banks convert these funds into mobile money; - 5. MMOs organize information and outreach campaigns to help beneficiaries apply through an established Know-Your-Customer (KYC) process using the identity scheme agreed with the government; - 6. Recipients are given a mobile wallet containing the amount of mobile cash distributed by the government. - Post-distribution options: - Mobile wallet owners can cash-out through local agents partnering with the MMO; - Use mobile money directly to pay utility bills or purchase goods and services at merchants (person to business (P2B) payment), supporting social distancing. ### Role of Mobile Phones and Mobile Money in G2P Delivery - Rationale: - Mobile G2P programs can reach unbanked populations and support social distancing via P2B payments. - Infrastructure contrasts and definitions: - 228 mobile money agents per 100,000 adults vs. 11 banks and 33 ATMs per 100,000 adults. - Mobile money: digital medium of exchange and store of value using mobile money accounts, typically offered by an MNO or another entity in partnership with an MNO (Chabra and Das, 2019). - Country examples of mobile-based approaches: - Brazil: Auxilio Emergencial via mobile money accounts; registration via website or app; option to open a mobile savings account at one state-owned bank. - Togo: Novissi cashless transfer program targeting informal adult workers identified via voter IDs; transfers via mobile money with a top-up for women recipients. - Peru: Bono Independiente recipients receive a code and link via SMS to access simplified mobile banking when they do not have a bank account. - Nigeria: Partnership with MNOs to identify vulnerable informal workers through airtime purchase patterns. - Survey evidence: - Informal business mobile money use ranged between 20 percent and 82 percent in nine cities across four African countries; in Mozambique twice as many informal business owners used mobile money as the average population (World Bank Group, 2020b). ### Advantages of G2P Mobile Transfers and Channel Comparison - Advantages: - Mitigate logistic, health, and individual challenges tied to in-person cash provision (example: Niger recipients traveling approx. 2 km (one way) (~half an hour) vs. mobile money recipients <0.5 km (<10 minutes) (Aker et al. 2016)). - Bring financial accounts to the unbanked (savings, credit history). - Empower women financially. - Help SMEs formalize and grow. - Improve government efficiency and transparency, speed delivery, and reduce leakages. - Delivery channel summary (preserved format from source): - Cash: pros—simple, trusted; cons—leakage risk, theft, human interaction (examples: India, Ecuador). - Money Order: pros—authentication, no bank account; cons—same as cash (example: Tunisia). - Cash Card: pros—authentication, no bank account; cons—same as cash (examples: Brazil, Philippines). - Bank Account: pros—secure, no human interaction; cons—need bank account (examples: USA, Peru, Colombia). - Mobile Payment: pros—see Mobile Transfers advantages; cons—need mobile phone, digital literacy (examples: Uganda, Kenya, Zimbabwe, Jordan). - Note: About 20 percent of developing countries still use cash for social benefits payments. ### An End-to-End Framework: Eight Building Blocks for Sustainable Mobile G2P - Framework purpose: - A holistic framework to inform short-term pandemic measures ensuring sustainability, risk mitigation, and iterative improvements. - Describes eight building blocks aligned with the end-to-end money flow in a mobile G2P ecosystem. - Helps stakeholders assess country readiness and guide implementation paths to increase maturity. - The eight building blocks (overview, with operational highlights below): - 1. Beneficiaries - 2. Digital Government (data, systems, controls) - 3. Mobile Money Operators (MMOs) - 4. Financial Institutions - 5. Cash-out Network - 6. Payment Acceptance Network - 7. Business Model Elements - 8. Digital Inclusion Foundation ### Building Block 1: Beneficiaries — design questions, enablers, and maturity staging - Core design questions: - Who is eligible? - How do they prove their identity? - How to maximize adoption by beneficiaries? - Enablers and guidance: - Eligibility Criteria: - Rely on information broadly available; be transparent and simple (e.g., age, gender, household composition, geographical targeting). - Designing exclusion criteria may be easier than inclusion criteria when risk of excluding many households in need is high. - Example programs: Keluarga Harapan (Indonesia, 2017); India communicated exclusion criteria (professions, taxpayers). - KYC Requirements: - Acceptable proofs: voter card, national ID card, health coverage ID; access/spend mechanisms: PIN, password, biometrics. - Some central banks reduced KYC for small payments (examples: Colombia and Ghana). - FATF provided guidance on digital onboarding and simplified customer due diligence (FATF, 2020a). - User Experience: - Critical for adoption; poor UX led to mixed results including limited improvement in financial inclusion (Baur-Yazbeck and others, 2019). - Recourse mechanisms should be in place to limit errors. - Maturity stages: - 1. “Minimum required” enablers. - 2. “Good-to-have” enablers. - 3. “Great-to-have” enablers (state of the art: examples M-Pesa, WeChat Pay, Alipay). - Typical risks to mitigate: financial exclusion due to identity issues, forgery, inconsistent data, identity theft, cyber-crime. ### Building Block 2: Digital Government — data, systems, and controls - Key points: - More complete socioeconomic information enables precise targeting, digital ID use, analytics, and fraud detection. - Collaboration and data sharing across public agencies and with private partners (e.g., MNOs) help mitigate lack of accurate government data. - Enablers and practical steps: - Social Registry: - If no reliable database exists, enable online self-registration and community-based identification. - Example: Jordan used Takaful social register and expanded online enrollment. - Rwanda used Ubudehe grassroots network to identify households in Kigali. - Standards and Open Architecture: - Standards accelerate open mobile money platforms and compatibility with card schemes (GSMA, 2020). - Example: Peru used BiM (Billetera Móvil) mobile money platform open to financial institutions, MNOs, and fintech firms. - Streamlined controls and effective procedures: - Temporary PFM adjustments may be required to handle emergencies without introducing incompatible complexities or delays. - Typical risks: exclusion to avoid taxes, corruption of intermediaries, inconsistent data, privacy leaks, duplicate payments, cyber-crime, biased algorithms. ### Building Block 3: Mobile Money Operators (MMOs) — selection and partnership considerations - Roles and examples: - MMOs issue electronic money via mobile wallets; providers include MNOs, banks, fintechs (examples: GCash, Wave Money, GrabPay, M-Pesa, Tigo Cash, Paga, Yoco, Tencent, Alipay). - South Asia mobile money annual growth cited as 46 percent (Chhabra and Das, 2019). - Selection/collaboration elements: - Quality of Service: clarify service levels, risk management, reporting; examples of high-quality services (Tigo in Paraguay and Tanzania). - Agent Network Coverage: essential for rural reach and onboarding support. - Mobile Coverage: adequate reliable mobile coverage (at least 2G, and when feasible 3G) to avoid excluding populations; example policy remedy: Zambia changed fee structures to boost coverage. - Regulatory Requirements: safeguard consumer funds by investing equivalent outstanding mobile money in safe liquid assets via regulated institutions (GSMA, 2016). - Typical risks: reach limitations, inadequate regulation, data privacy, liquidity, digital literacy constraints. ### Building Block 4: Financial Institutions — interactions and enablers - Role: - Receive government funds, place them in mobile money accounts for MMOs, agents, merchants. - Common practice: at least one regulated financial institution connects to the government’s Treasury. - Key enablers: - Branches and ATM Safety: prepare for social distancing; diversify certified cash-out agents. - Ease of Doing Business and Trust: customer trust and user support matter (example: Pakistan central bank asked banks to open call centers 24/7). - Risk Management: accountability for integrity, security, privacy, AML/CFT, and robust KYC (example: Bank of Ghana authorized mobile money users to use existing KYC-protected accounts). - Typical risks: custody risk, deposit insurance applicability, cyber-readiness of banks. ### Building Block 5: Cash-out Network — role and enablers - Functions: - CICO networks enable exchange of mobile money for physical cash; many beneficiaries withdraw 100 percent of payment at once. - Traditional locations: bank branches, ATMs; indirect channels: retail outlets, supermarkets, pharmacies. - Key enablers: - Delivery Channel Mix: diversify and densify channels; mobile money agent networks have on average twenty times more reach than bank branches. - Liquidity Management: project cash-out volumes, coordinate banks and agents, prevent crowd formation (e.g., Ecuador doubled access points; Peru used geolocation based scheduling). - Trained Personnel: train and audit CICO staff; coordinate digital and financial literacy initiatives. - Typical risks: corruption, manual mistakes, liquidity shortfalls, low digital literacy. ### Building Block 6: Payment Acceptance Network — incentives to reduce cash out - Objective: - Large merchant network encourages use of mobile payments and reduces cash out. - Evidence and examples: - 2019: more value circulated in mobile money system than left it for the first time. - Zimbabwe: central bank, Econet Wireless, and Mastercard partnership enabled Ecocash merchant acceptance at roughly 3,800 merchants. - Key enablers: - Integrate businesses in program design to limit cash out. - Support full digital payment ecosystem flows across government, people, and businesses. ### Building Block 7: Business Model Elements — program design, communication, management - Critical elements: - Program Features: clear measurable parameters (eligibility, transfer amount, frequency, conditions, duration); consider conditioning features where appropriate. - Effective and Frequent Communication: clear, simple, well publicized communication is critical (example: Togo’s Novissi targeted women and used ads/social media). - Program Management: treat G2P like a complex product—define roles, reporting, continuous improvement, deadlines, and budget. - Risks: - Single “broken link” (fraud controls, downtime, confusing account opening) can impair delivery and trust. ### Building Block 8: Digital Inclusion Foundation — access, gender, measurement - Core issue: - Digitalization can leave behind populations lacking physical, economic, cultural, or literacy access. - Three key enablers: - Digital Access and Affordability: - Requirements: reliable electricity, affordable connectivity, connected devices, knowledge, and financial literacy. - Examples: Malaysia, Panama mandated reduced fees; South Africa allowed TV Whitespace spectrum rollout in March 2020 (ICASA, 2020). - Reference index: Enhanced Digital Access Index (EDAI) (Alper and Miktus, 2019). - Gender Gap: - Over the past seven years, the digital divide between men and women in EMDEs has widened (Figure 12). - On average, women are 10 percent less likely to own a mobile phone (Iskenderian, 2020); affordability is the most significant barrier (Lindsey and Wilson, 2019). - Example: Pakistan’s Ehsaas Kafaalat started to distribute free smartphones and biometrically protected bank accounts to seven million poor women (February 2020). - D3 Framework (Digitize, Direct, Design) promoted to enhance women’s economic empowerment. - Measurement and Monitoring: - Collect gender-disaggregated information and monitor internet user gender gap trends (ITU estimates and figures referenced). ### Fee Structure, Interoperability, and Payment Platforms - Fee measures: - Temporary reduction or elimination of mobile money payment fees during COVID-19 (examples: Ghana, Kenya (Airtel), Uganda (Airtel, MTN), Rwanda). - Heavier taxation of mobile transactions relative to other channels may be regressive; historical case: Uganda 2018 new tax led to street protests and P2P values fell by over 50 percent. - Interoperability: - Interoperability between banks, mobile wallets, and payment schemes is foundational; examples: Philippines NRPS; GSMA Mobile Money API and Mojaloop referenced as foundational projects. ### Limitations, Risks, Cyber-Security, and Regulatory Concerns - Structural and technology constraints: - Lack of electricity, connectivity, insufficient digital literacy, cyber risks, fraud, inadequate regulation. - Custody risk: mobile transfers often rely on partner banks and could be sensitive to financial sector shocks. - Cyber-security and digital fraud: - Threaten confidentiality, integrity, availability of systems and citizens’ information; crisis periods exacerbate risks. - Risk management recommendations: governance across the eight building blocks, standard protection of infrastructure, inter-agency IT taskforces, business continuity plans. - Regulatory concerns: - Objectives: foster provider participation while ensuring consumer protection, financial integrity, and stability. - Gaps: many countries lack adapted frameworks to allow non-financial service providers’ participation or to address data privacy. - Recommendations: require service providers to protect customer data, comply with AML/CFT, apply FATF risk-based flexibility where needed, and pursue international coordination on data privacy and cross-border digital issues. - Procurement and PPP risks: transparent procurement and documentation to mitigate cost-overruns and corruption. ### Possible Evolutions of Mobile G2P Platforms and Emerging Technologies - Maturity and ecosystem outcomes: - Interoperable retail payment systems, digital identity, and digital data hubs as backbone. - Potential to increase formalization, transparency, efficiency; G2P flows could extend to P2P, P2B, P2G, and B2G. - CBDC and emerging tech: - Some countries exploring CBDC (example: “Sand Dollar” project in the Bahamas). - Emerging technologies: blockchain, AI, big data, 5G; potential uses in data exchange, fraud detection, predictive analytics. - Risks: - New technologies amplify infrastructure, cyber, and regulatory complexity; require new rules on data collection, storage, and algorithmic bias mitigation. ### Policy Recommendations and Operational Guidance (Selected) - Revisit quick emergency fixes and strengthen systems as countries transition to normal operations to support: - Scalability of social protection systems. - Incorporation of shock-responsive design features (e.g., triggers that adapt programs in emergencies). - Limiting program exclusion errors in a fiscally sustainable manner (progressive universalism). - G2P mobile transfers should complement, not replace, other support types (e.g., in-kind or food distribution). - Design and implementation steps: deploy the end-to-end eight building blocks, mitigate cyber and fraud risks, ensure consumer protection, and pursue interoperability and digital inclusion measures. ### Representative Numeric and Programmatic Facts (preserved exactly) - Additional fiscal outlays have mainly financed expansion to cover over 1.8 billion people worldwide. - Governments most often chose G2P monetary transfers, representing about 51 percent of all social measures planned and/or implemented. - Population coverage of monetary transfers more than doubled to 38 percent on average over 5 months. - Infrastructure contrast: 228 mobile money agents per 100,000 adults vs. 11 banks and 33 ATMs per 100,000 adults. - In countries with very high prevalence of informality, about 45 percent of informal businesses make USD 2 or less per day. - Example program transfers: Uganda SAGE transfer 25,000 Ugandan shillings (about USD 10 at that time) per month paid every two months. - Togo Novissi transfers: monthly transfers of 10,500 CFA (about USD 18) for men and 12,250 CFA (about USD 21) for women, and close to USD 35 for motorbike taxi drivers. - Tigo Tanzania agent network: over 150,000 agents; Tigo Pesa contributed nearly a third of overall earnings for Tigo Tanzania, estimated at roughly USD 40 million (as of 2019). - Peru BiM: as of December 2019: registered 1.3 million transaction per month. - Pakistan Ehsaas Kafaalat distributed free smartphones and biometrically protected bank accounts to seven million poor women (February 2020). - South Asia mobile money annual growth cited as 46 percent (Chhabra and Das, 2019). - About 20 percent of developing countries still use cash for social benefits payments. *Source: wpiea2020198-print-pdf - Appendix 1: Key Enablers Maturity Map, IMF Working Paper (excerpts from the provided PDF content).* ### Appendix 1: Key Enablers Maturity Map .................................................................................. ### Appendix 1: Key Enablers Maturity Map ### Background: Scaling Up G2P Social Transfers During COVID-19 - On average, countries have spent an additional 1 percent of GDP to flex up pre-existing social programs—insurance, assistance and labor market-related—and introduced new ones. - Additional fiscal outlays have mainly financed the expansion of social assistance systems to cover over 1.8 billion people worldwide (Gentilini et al. 2020). - Governments most often chose G2P monetary transfers, representing about 51 percent of all social measures planned and/or implemented, with a population coverage that has more than doubled to 38 percent on average over 5 months. - Rapid expansion risks: duplication, high administrative costs, undermining well-functioning social programs if improperly repurposed (example: Philippines Emergency Subsidy Program linked to Pamilyang Pilipino Program created social discontent). - Countries that invested in scalable and shock-responsive social safety nets are better positioned for COVID-type crises. ### Key Findings on Population Vulnerability and System Gaps - The pandemic generates large negative income shocks across the board and proportionately more so at the bottom half of the income distribution and among informal business owners. - Many EMDEs face weak and patchy social protection systems and often lack crucial information to expand them effectively. - Informality compounds targeting difficulties because verifiable employment and income data are typically available only for formally registered workers. - Example statistics and observations from cited figures and studies: - Over 1.8 billion people covered by expanded social assistance (Gentilini et al. 2020). - Population coverage of monetary transfers rose to 38 percent on average over 5 months. - In countries with very high prevalence of informality, about 45 percent of informal businesses make USD 2 or less per day (Ayana Aga, Jolevski, Muzi. 2020). ### The Basic Delivery Trinity: ID, Socioeconomic Data, and Delivery Mode - Three integrated elements core to broad and adequate income support: - A universal identification (ID) system. - Socioeconomic data on households (social registries). - A mode of benefit delivery (digital or analog). - Country taxonomy by expansion-readiness: - Ready: wide prior coverage for two of the three elements (examples: Pakistan, India). - In-between: patchy assets (example: Philippines—75 percent social registry coverage but lacks reliable ID and limited bank coverage). - Not started: very low-income countries with narrow or no safety net and rudimentary delivery platforms (examples: Haiti, Lao PDR). - Trade-offs in rapid rollout: prioritization among broad coverage, fiscal sustainability, and virus containment is often unavoidable. ### Role of Mobile Phones and Mobile Money in G2P Delivery - Governments leverage high mobile phone penetration and mobile accounts relative to bank access points for rapid scale-up. - Global infrastructure contrast: 228 mobile money agents per 100,000 adults vs. 11 banks and 33 ATMs per 100,000 adults. - Mobile money definition in source: digital medium of exchange and store of value using mobile money accounts, typically offered by a mobile network operator (MNO) or another entity in partnership with an MNO (Chabra and Das, 2019). - Mobile networks used to: - Disseminate crucial information. - Collect household and individual data to better target support. - Provide a platform to deliver money. - Country examples of mobile-based approaches: - Brazil: Auxilio Emergencial delivered through mobile money accounts; citizens register via website or app; option to open a mobile savings account at one state-owned bank. - Togo: Novissi cashless transfer program targeting informal adult workers identified via voter IDs; transfers via mobile money with a top-up for women recipients. - Peru: Bono Independiente recipients receive a code and link via SMS to access simplified mobile banking when they do not have a bank account. - Nigeria: Partnership with mobile network operators to identify vulnerable informal workers through airtime purchase patterns. - World Bank survey data: in nine cities across four African countries, informal business mobile money use ranged between 20 percent and 82 percent, and in Mozambique twice as many informal business owners used mobile money as the average population (World Bank Group, 2020b). ### Advantages of G2P Mobile Transfers and Channel Comparison - G2P mobile transfers mitigate logistic, health, and individual challenges tied to in-person cash provision (e.g., travel time to collect transfers). - Example: Niger recipients traveling for cash transfers travelled approx. 2 km (one way) (~half an hour), vs. mobile money recipients who travelled less than 0.5 km (<10 minutes) (Aker et al. 2016). - G2P mobile transfers can: - Bring financial accounts to the unbanked (savings, credit history). - Empower women financially. - Help SMEs formalize and grow. - Improve government efficiency and transparency, speed delivery, and reduce leakages. - Table of delivery channels (format summary preserved from source): - Cash: Receive at post office/agents/bank; save at home; can be used anywhere; pros—simple, trusted; cons—leakage risk, theft, human interaction (examples: India, Ecuador). - Money Order: Receive at post office/bank; save at home; can only be cashed out; pros—authentication, no bank account; cons—same as cash (example: Tunisia). - Cash Card: Receive at post office/ATM; save at home; can only be cashed out; pros—authentication, no bank account; cons—same as cash (examples: Brazil, Philippines). - Bank Account: Receive at bank/ATM; save in bank account; use ATM, debit card, checks; pros—secure, no human interaction; cons—need bank account (examples: USA, Peru, Colombia). - Mobile Payment: Receive remotely; save in mobile account; use merchants and agents; pros—see Mobile Transfers advantages; cons—need mobile phone, digital literacy (examples: Uganda, Kenya, Zimbabwe, Jordan). - About 20 percent of developing countries still use cash for social benefits payments. ### Policy Recommendations and Operational Guidance - Quick emergency fixes should be revisited and strengthened as countries transition to normal operations to support: - Scalability of social protection systems. - Incorporation of shock-responsive design features (e.g., triggers that adapt programs in emergencies). - Limiting program exclusion errors in a fiscally sustainable manner (progressive universalism). - G2P mobile transfers should complement, not replace, other support types (e.g., in-kind or food distribution). - Governments should be aware of design and implementation steps to fully exploit advantages of mobile G2P; these are detailed within a comprehensive framework. ### An End-to-End Framework: Eight Building Blocks for Sustainable Mobile G2P - A holistic framework informs short-term pandemic measures ensuring sustainability, risk mitigation, and iterative improvements. - The framework describes eight building blocks aligned with the end-to-end money flow in a mobile G2P ecosystem (Figure 6 referenced in source). - The building blocks help stakeholders assess country readiness and guide implementation paths to increase maturity depending on existing conditions. - Appendix 1 (this content unit) describes various implementation paths to increase the maturity level depending on country conditions; Appendix 2 presents G2Px options for social assistance payment designs; the framework focuses on the mobile payment option. *Source: wpiea2020198-print-pdf - Appendix 1: Key Enablers Maturity Map, IMF Working Paper (excerpts from the provided PDF content).* ### 1. The government selects one or multiple mobile money operators (MMOs) such as mobile ### wpiea2020198-print-pdf - 1. The government selects one or multiple mobile money operators (MMOs) such as mobile ### G2P mobile cash: typical operational flow - 1. The government selects one or multiple mobile money operators (MMOs) such as mobile network operators (MNOs, e.g., Orange), commercial banks, or fintech firms, which offer mobile money in the country; - 2. Existing national databases or MMO data are used to select applicants who meet the program’s eligibility criteria; - 3. The government wires the money to the bank partnering with the MMOs and shares the identity of eligible recipients; - 4. Banks convert these funds into mobile money; - 5. MMOs organize information and outreach campaigns to help beneficiaries apply through an established Know-Your-Customer (KYC) process using the identity scheme agreed with the government; - 6. Recipients are given a mobile wallet containing the amount of mobile cash distributed by the government. - Post-distribution options: - Mobile wallet owners can cash-out through local agents partnering with the MMO; - Use mobile money directly to pay utility bills or purchase goods and services at merchants (person to business (P2B) payment), supporting social distancing in the COVID-19 context. ### Program rationale, risks, and maturity staging - Rationale: - Mobile G2P programs can reach unbanked populations and support social distancing via P2B payments. - Key risk examples if building blocks are poorly designed: - Diminished trust among unbanked individuals if financial institutions and MMOs are not properly regulated; - Beneficiaries converting mobile money to cash if merchant acceptance is insufficient, causing long queues at cash-out agents, violating social distancing, and increasing individual costs. - Maturity stages for enablers (three stages presented): - 1. “Minimum required” enablers: place mobile G2P on an easier improvement trajectory; - 2. “Good-to-have” enablers: reach broader, better-identified populations, limit certain risks, achieve economies of scale; - 3. “Great-to-have” enablers: moving targets representing the current state of the art (examples: M-Pesa in Kenya, WeChat Pay and Alipay in China). - Risk note: - Risks are correlated with maturity; low-maturity risks include fraud, corruption, or human mistakes; higher-maturity risks include cyber-fraud and digital privacy. ### Building Block 1: Beneficiaries — design questions and enablers - Three design questions: - Who is eligible? - How do they prove their identity? - How to maximize adoption by beneficiaries? - Enablers and guidance: - Eligibility Criteria: - Must rely on information broadly available to minimize inclusion/exclusion errors; - Be transparent and simple (e.g., age, gender, household composition, geographical targeting) in crises; - Designing exclusion criteria may be easier than inclusion criteria when risk of excluding many households in need is high; - Example successes: Keluarga Harapan (Indonesia, 2017) used Ministry of Social Affairs data for targeted mobile money transfers; India communicated exclusion criteria (specific professions or individuals paying personal income tax). - Note: Absence of reliable citizen registries might force trade-offs or use alternate data sources. - KYC Requirements: - Specify acceptable proofs of identity (voter card, national ID card, health coverage ID) and proof of address; - Describe access/spend mechanisms (PIN, password, biometric data); - Some central banks reduced KYC for small payments to ease onboarding (examples: Colombia and Ghana); - FATF provided guidance on digital onboarding and simplified customer due diligence in the context of COVID-19 to balance fraud vigilance and alternate digital KYC mechanisms (FATF, 2020a). - User Experience: - Critical for adoption: beneficiaries must understand the journey from registration to use; - Poor attention to user experience has led to mixed results including limited improvement in financial inclusion (Baur-Yazbeck and others, 2019). - Recourse mechanisms should be in place to limit errors. ### Building Block 2: Digital Government — data, systems, and controls - Overview: - Many EMDEs address missing socioeconomic data and non-shock-responsive PFM systems; more complete socioeconomic information enables more precise targeting and access to technologies (digital ID, analytics, fraud detection). - Close collaboration and data sharing across public agencies and with private partners (e.g., MNOs) helps mitigate lack of accurate/universal government data, especially for the informal sector. - Enablers and practical steps: - Social Registry: - If no reliable database exists, enable individuals to apply via digital platforms with simple information for enrollment; - Example: Jordan used Takaful social register and expanded online enrollment to open mobile wallets or connect bank accounts for direct cash transfer; - Other identification methods can complement social registries (community-based referrals); Rwanda used the Ubudehe “grassroots network” to identify impacted households in Kigali. - Standards and Open Architecture: - Technology standards support end-to-end frameworks and mobile money platform implementation; - Example: Peru rapidly transferred money through BiM (Billetera Móvil) mobile money platform open to financial institutions, MNOs, and fintech firms; - Standards accelerate open mobile money platforms and foster compatibility with card schemes and other payment systems (GSMA, 2020). - Streamlined controls and effective procedures: - Core PFM systems may need temporary adjustment to handle emergencies without introducing incompatible complexities or delays. Box 1: Emerging Standards and Open Architectures for Mobile Payment (summarized) - GSMA Mobile Money API: - Communication standard for key mobile money use cases (domestic/international remittance, merchant payments, bill payments, interoperability); - Benefits: rapid partner on-boarding, ease of support and maintenance, reduced total cost of ownership; - Technical best practices: RESTful principles, JSON data format, ISO international standards, virtualization of payment functions, security recommendations. - Mojaloop: - Open-source code developed in 2017 (Gates Foundation, Level One Project) to make digital financial services more inclusive; - Key functions: push payment model with same day settlement and notification; interoperability across mobile money actors; adherence to international standards (e.g., ISO 20022); system-wide fraud and security protection; proportional identity and KYC implementation; - 2018 development: Orange and MTN announced Mowali, an implementation of Mojaloop to enable interoperable payments across Africa (bringing together over 100 million mobile money accounts and operations in 22 of sub-Saharan Africa’s 46 markets). ### Building Block 3: Mobile Money Operators (MMOs) — selection and partnership considerations - Role: - MMOs issue electronic money via mobile wallets and often provide payment capabilities and rails previously non-existent in EMDEs; services can be offered by MNOs, commercial banks, or fintech firms. - Examples: GCash (Philippines), Wave Money (Myanmar), GrabPay (Malaysia), M-Pesa (Kenya), Tigo Cash (Tanzania), Paga (Nigeria), Yoco (South Africa), Tencent and Alipay (China). - South Asia mobile money annual growth cited as 46 percent (highest across regions) (Chhabra and Das, 2019). - Key selection/collaboration elements: - Quality of Service: - Governments may clarify expected service levels, risk management, and reporting requirements; - Success examples: Tigo’s high-quality services in Paraguay and Tanzania; partnering with fintech firms that have well-designed user experience has boosted adoption in Southeast Asia. - Agent Network Coverage: - Availability and quality of agents (local retail stores or non-retail independent agents) in urban and rural areas are essential, especially when online onboarding and remote support are limited. - Mobile Coverage: - Adequate reliable mobile coverage (at least 2G, and when feasible 3G) across the country is key to avoid excluding populations and widening the “digital divide” (building block 8); - Policy remedy example: Zambia changed digital payment fee structures to boost MMOs’ coverage in commercially unviable regions (Baur-Yazbeck, 2019). - Mobile Money Regulatory Requirements: - MMOs must ensure that the full equivalent of outstanding mobile money issued is invested in safe liquid assets (commercial bank deposits and low-risk government securities) via regulated financial institutions through trust or escrow accounts; - Most countries have regulatory requirements to safeguard consumer funds (GSMA, 2016). *Source: Excerpt from wpiea2020198-print-pdf (IMF).* ### Box 2: How USSD Mobile Wallets Work ### Box 2: How USSD Mobile Wallets Work ### Overview of USSD and user access - USSD (Unstructured Supplementary Service Data) was created in 1994 and provides text-only services, including financial services, accessible by dialing a short code on a phone. - USSD works on standard phones and smartphones without installing any app and does not require a subscription to mobile data. - The service is application-less, allowing a mobile wallet to become available across an entire country for every customer of the service provider the moment it is deployed on the network. - Example: Orange Money customers in Liberia dial *144# to check their mobile wallet balance. - Strengths: very cost effective and popular; available immediately on deployment. - Limitation: not very user friendly. ### Typical user interaction - Users interact with mobile wallets via USSD menus to perform actions such as sending mobile money to another person (P2P) or to a merchant (P2B). - (The source includes illustrative pictures of the interaction flow.) ### Infrastructure ownership and regulatory implications - USSD infrastructure is typically owned and operated by mobile network operators (MNOs). - Mobile wallets can also be offered by third-party mobile money operators (MMOs), which are typically banks. - In several countries, MMOs have complained about being barred from accessing USSD by dominant MNOs. - Policy implication in crisis contexts: eliminate barriers to USSD access to accelerate low-cost mobile wallet deployment. ### Interactions with Financial Institutions (Building Block 4) — key enablers - Financial institutions receive government funds and place them in mobile money accounts for participants such as MMOs, cash-out agents, and merchants. - Common country practice: at least one regulated financial institution connects to the government’s Treasury. - Key enablers to establish or strengthen collaboration: - Branches and ATM Safety: beneficiaries often cash out 100 percent of their payment at once; social distancing during pandemics makes cash-out harder and riskier, so easing mobile payments and multiplying/diversifying certified cash-out agents is important. - Ease of Doing Business and Trust: assess participating institutions’ ability to interact effectively; customer trust, user support, and internet presence matter. Example practices: Pakistan’s central bank requested banks open call centers 24/7 for customer support; Colombia exploring simplified KYC for unbanked beneficiaries. - Risks Management: institutions are accountable for integrity, security, privacy, fraud prevention (AML/CFT), and robust KYC. Example: Bank of Ghana authorized mobile money users to use existing KYC-protected accounts to register for the program. ### Cash-out Network (Building Block 5) — role and enablers - Cash-in / cash-out (CICO) networks enable beneficiaries to exchange mobile money for physical cash safely. - Studies show the majority of beneficiaries withdraw 100 percent of their payment at once. - Traditional CICO locations: bank branches, ATMs; indirect channels: retail outlets, supermarkets, pharmacies. - MNOs may operate their own CICO networks or use separate agent networks. - Key enablers for G2P program readiness: - Delivery Channel Mix: aim for diversified and dense channels reaching remote/rural areas. Mobile money agent networks have on average twenty times more reach than bank branches. Governments have used incentives (e.g., tiered fees) to promote service in underserved regions. - Liquidity Management: project cash-out volumes, enlist support of banks and agent network managers, and prevent crowd formation. Examples: Ecuador doubled cash-out access points and established payment dates based on beneficiaries’ ID last digits; Peru used geolocation to direct beneficiaries to specific places at a given time. - Trained Personnel: CICO staff (except ATM withdrawals) should be trained, audited regularly, and provide adequate customer service. Digital and financial literacy initiatives in EMDEs could be coordinated to include CICO agents. ### Payment Acceptance Network (Building Block 6) — incentives to reduce cash out - A large merchant network and involvement of public and private actors encourage beneficiaries to use mobile payments and reduce cash out. - Digitization momentum: in 2019, more value circulated in the mobile money system than left the system for the first time, setting the stage for broader acceptance of mobile money. - Example of public-private partnership: In 2018, Zimbabwe’s central bank, Econet Wireless, and Mastercard partnered to enable merchants to accept Ecocash mobile money in stores with card readers, allowing over 3,800 merchants to be paid with mobile money. - Key enablers: - Integrate businesses in program design to limit cash out. - Support full digital payment ecosystem flows across government (G), people (P), and businesses (B), with near-term focus on G2P and P2B payments. *Source: Box 2: How USSD Mobile Wallets Work (from the supplied PDF content).* ### section IV). ### wpiea2020198-print-pdf - section IV) ### Fee Structure and Payment Platforms - Fee Structure - Temporary reduction or elimination of mobile money payment fees (both for consumers and merchants) has been a popular measure during the COVID-19 crisis. - Examples: Ghana’s mobile industry worked with the central bank to implement free mobile service transactions; similar collaborations in Kenya (Airtel), Uganda (Airtel, MTN), Rwanda (most banks and MNOs) facilitated mobile money use during the pandemic. - Heavier taxation of mobile transactions relative to other financial transactions—e.g., via the banking system—may prove regressive and have unintended consequences (GSMA, 2020c). - Footnote context: reductions/eliminations have taken many forms, including central banks eliminating transaction taxes for person-to-person mobile transfers, taxes paid by merchants on mobile money transactions, or MMOs agreeing to temporarily reduce their charges. - Historical example: In 2018, a new tax on mobile transactions in Uganda led to street protests; P2P values fell by over 50 percent in a few months, in favor of cash. - Payment Platforms and Interoperability - Mobile money development has often been hindered by interoperability issues between banks, mobile wallets and various payment schemes. - Mobile money actors and governments are increasingly collaborating on improving interoperability of mobile payments. - Example: Prior to the pandemic, the central bank of Philippines implemented the National Retail Payment System (NRPS), a regulatory framework that requires interoperability among payment service providers, including non-bank e-money issuers, facilitating MMOs’ participation in PESONet and InstaPay automated clearing houses. - Foundational interoperability projects mentioned: GSMA Mobile Money API and Gates Foundation’s Mojaloop (Martins, 2020). ### Building Block 7: Business Model Elements - High-level point: A mobile G2P program benefits from industry best practices for digital solutions; business model covers customer experience, distribution channels, marketing, change management, risk management, technology upgrade, and strategic partnerships. - Key risk: Single “broken link” (e.g., poor fraud controls, technology downtime, confusing account opening process) can impair a well-designed product. - Three particularly important enablers for sustainable success beyond short-term income assistance: - Program Features - Set clear and measurable parameters to enable better performance tracking and reduce confusion. - Examples: eligibility criteria, transfer amount, frequency, applicable conditions, overall duration. - Some countries have considered conditioning features to certain behaviors (e.g., COVID-19 testing, using a portion of the money to make mobile payments). - Effective and Frequent Communication - Clear, simple and well publicized communication is critical. - Example: Togo’s Novissi G2P program prioritized targeting women and communicated via ads and social media; effective communication and product management attracted twice as many women as men to the cash transfer scheme. - Government frequently updates Novissi data on its website: https://novissi.gouv.tg/en/ (note: included in source footnote). - Program Management - Treat a G2P Program like any other major complex product: define roles and responsibilities across building blocks, reporting processes, continuous improvement, controlled deadlines and budget. ### Building Block 8: Digital Inclusion Foundation - Core issue: Digitalization of payments can leave behind vulnerable populations lacking physical, economic, cultural, or literacy access to technology. - Coordination: Close coordination with other government agencies, technology, telecommunication, and fintech companies may help bridge the digital gap (Davidovic and others, 2019). - Development goals: This building block can support UN Sustainable Development Goals such as lowering poverty, bridging the gender gap and reducing inequality. - Regional exposure: Certain regions such as sub-Saharan Africa are more exposed to risk of digital exclusion despite recent progress (IMF, 2020). - Three key enablers to improve reach of mobile G2P to remote or poor populations: - Digital Access and Affordability - Requirements: reliable electricity, affordable connectivity, connected devices, required knowledge, and financial literacy. - Alper and Miktus (2019) proposed an Enhanced Digital Access Index (EDAI) to measure population ability to access digital services (Appendix 4 and Figure 11). - Country actions: mandated service providers to reduce electricity and connectivity fees (Malaysia, Panama); strengthen availability and resilience (Vietnam, Chile, Argentina, Qatar); explored new ways to provide connectivity. - Example: March 2020 South Africa allowed use of TV Whitespace spectrum for roll-out of affordable or free data services in rural and remote areas (ICASA, 2020). - Figure reference: “Figure 7: Progress in digital access in sub-Saharan Africa (measured by EDAI) remains hindered by high costs, and lags in remote areas.” - Gender Gap - Over the past seven years, the digital divide between men and women in EMDEs has widened (Figure 12). - This is especially challenging since women represent a majority of the informal sector and caregiving communities, particularly impacted by COVID-19 (Zimmerman, May, Kellison. 2020). - EMDEs should recognize widening technology gap not only between women and men (ITU, 2019), but also with migrants, internally displaced people or persons with disabilities (UN, 2020), and design accessibility accordingly. - Example: In February 2020, Pakistan’s Ehsaas Kafaalat started to distribute free smartphones and biometrically protected bank accounts to seven million poor women, facilitating access to government money securely. - Statistic: On average, women are 10 percent less likely to own a mobile phone (Iskenderian, 2020); affordability is the most significant barrier to womens’ mobile phone ownership (Lindsey and Wilson, 2019). - Note: The D3 Framework (Digitize, Direct, Design) is promoted to enhance women’s economic empowerment through cash transfers (Zimmerman, May, and Kellison, 2020). - Measurement and monitoring - Figure reference: “Figure 8: Over the past 7 years, the internet user gender gap has widened in EMDEs.” - Note on ITU estimate: The gender gap represents the difference between the internet user penetration rates for males and females relative to rate for males, expressed as a percentage. ### III. Limitations and Risks — Overview - Structural constraints: lack of adequate infrastructure (including electricity and connectivity), insufficient digital literacy. - Technology-related risks: cyber risks, fraud, lack of adequate regulation — require immediate attention. - Custody risk: Most mobile transfers rely on at least one bank for custody or escrow accounts and could be sensitive to financial sector shocks if the MNO’s partner bank is affected. - Deposit insurance: Conventional social assistance transfers could be covered under deposit insurance schemes if applicable. - Country heterogeneity: Varying levels of infrastructure and fiscal space demand different approaches; EDMEs with inadequate infrastructure have relied on public-private partnerships with MNOs and fintech firms (example: Interswitch in Nigeria). - Procurement risks: While PPPs can be important, effective procurement policies and transparent project documentation should mitigate risks such as cost-overruns and corruption. ### A. Cyber-Security and Digital Fraud - Cybersecurity risks threaten confidentiality, integrity, and availability of institutional data, applications, processes and citizens’ information. - Leakage or misuse of beneficiary data or consumer fraud could have serious reputational consequences and durable loss of trust. - Crisis exacerbation: Cybersecurity risks are often exacerbated during crises like the COVID-19 pandemic. - Risk management recommendations: - Thorough understanding of cybersecurity and digital fraud risks to hold stakeholders accountable for robust and secure G2P systems. - Each of the eight building blocks requires governance of cyber and digital fraud risks, including standard protection of infrastructure, applications, networks, and strengthened capacity in information security. - Inter-agency IT taskforces: Sharing knowledge and collaboration allowed many LIDCs to achieve cyber resilience objectives within a short period (Una and others, 2020). - Business Continuity Plans: Develop plans to demonstrate shock-responsiveness and guard against cyberattacks related to remote work (Leonovich, 2020); plans should identify core business processes and provide alternatives to sustain operations during emergencies. ### B. Regulatory Concerns - Regulatory objectives: Foster participation of G2P service providers while ensuring consumer protection, financial integrity, and financial stability. - Gaps: Many countries have not adapted regulatory/policy frameworks to allow participation of non-financial service providers in payment systems, or to address financial integrity or data privacy. - Pandemic response: COVID-19 has prompted policymakers to reduce regulatory compliance burden on mobile money issued by telecom or fintech firms. - Consumer protection: Customers of telecom/fintech-issued mobile money are often not as protected by regulation as those of regulated financial institutions. - Financial integrity measures: - Policymakers should remain vigilant to emerging financial crime related to the pandemic. - Authorities should require service providers to protect customer data, comply with AML/CFT standards, and ensure services are easy to use. - FATF’s risk-based approach provides flexibility relevant for countries lacking reliable identity or socio-economic registries (Financial Action Task Force, 2020a, 2020b). - International coordination: Policymakers should aspire for international agreements on data privacy, cybersecurity, digital identification, cross-border digital currencies, and regulation (Sahay and others, 2020). - Ongoing collaboration: Regulators and service providers should maintain alignment on risk assessment and ensure a risk-based AML/CFT approach (AFI, 2020). - Law enforcement support: Interpol’s assistance through ENACT helps police in Africa adopt proactive strategies to combat organized crime threats, facilitate information exchange, and enhance investigative skills (Interpol, 2020). ### IV. Possible Evolutions of Mobile G2P Platforms - Maturity and ecosystem view: - Framework introduces key elements at each maturity level for a mobile G2P payment system aiming to become sustainable and lay groundwork for robust social safety nets. - Some ideal scenarios may be accessible to some countries under certain conditions. - Longer-term government approach: consider whole digital government ecosystem; mobile frameworks expanded to support households could cover additional stakeholders, unlock use cases, and diversify access channels through interoperable arrangements to promote a cash-lite digital economy in the medium-term. - Digital infrastructure as backbone: interoperable retail payment systems, digital identity, and digital data storage hubs (AFI, 2020). - Potential outcomes: increase degree of formalization, improve transparency, introduce efficiency gains; G2P flows could circulate as P2P, P2B, G2B and return to government as P2G and B2G, improving domestic revenue mobilization and administrative systems. - Central Bank Digital Currency (CBDC) consideration: - Some countries exploring CBDC to expedite social assistance after public health emergencies or natural disasters. - Example: “Sand Dollar” project in the Bahamas designed to give residents easier access to financial services and government assistance after natural disasters and to include the entire population in digital payments; expected to improve tax administration and increase efficiency of government spending (CBB, 2019). - Emerging technologies: - Countries advancing digitalization may integrate blockchain, artificial intelligence, big data, 5G (example: China digitizing social security systems using blockchain, AI, big data, and 5G). - Blockchain-enabled data reporting systems expected to improve and accelerate transparent data exchange across government agencies and organizations, improving availability of data for targeted social assistance. - Machine learning could support governments in preempting fraud, predicting consumer needs, and reducing waste. - Risk amplification and regulatory needs: - Introduction of new technologies will increase infrastructure requirements, complexify cyber risk and digital fraud management, and demand more sophisticated regulation and supervision. - New rules will be required to regulate data collection, secure data storage, and validate that machine learning algorithms do not include inappropriate biases. - Policymakers should explore using emerging technologies to mitigate new risks (e.g., AI/ML for fraud detection, compliance monitoring, cyber security). - Close collaboration among national, regional and international stakeholders will be fundamental to build capacity and knowledge regarding cybersecurity and financial integrity. ### V. Conclusion — Key Takeaways and Policy Guidance - Scale and reach during COVID-19: - Many EMDEs ramped up mobile money platforms to provide income support at unprecedented scale. - Leveraging high penetration of mobile phones and mobile accounts relative to banks’ access points enabled governments to reach millions of workers and households, particularly in the informal economy. - Framework contribution: - The paper introduces a comprehensive framework of eight building blocks to build sustainable G2P mobile programs, derived from stylized facts and past initiatives. - The building blocks guide policymakers and regulators in adapting regulatory frameworks, scaling infrastructure, and choosing collaboration partners to support G2P mobile transfers. - Longer-term benefits: - Framework can help develop stronger social protection systems and contribute to strategic development goals. - Mobile transfer platforms can support inclusive growth by bringing accounts to the unbanked, empowering women financially, helping SMEs grow within the formal sector, and increasing transparency and efficiency of public resource management. - Risk management imperative: - Regardless of country maturity, any G2P solution introduces risks and constraints that must be mitigated and managed. - Digitalization will amplify risks; cyber security requires immediate attention, while regulation for data privacy, fraud mitigation, and protection of financial integrity standards requires concerted medium-term government effort. *Source: wpiea2020198-print-pdf - section IV).* ### References ### wpiea2020198-print-pdf - References ### Major themes reflected in the references - Digitalization of payments and government-to-person (G2P) transfers (examples: “The Future of G2P Payments: Expanding Customer Choice in Zambia”; “A New Generation of Government-to-Person Payments Is Emerging”; “DaviPlata: Taking Mobile G2P Payments to Scale in Colombia”). - Emergency social assistance and COVID-19 responses using digital channels (examples: “Policy Framework for Leveraging Digital Financial Services to Respond to Global Emergencies – Case of COVID-19”; “Social Protection and Jobs Responses to COVID-19: A Real-Time Review of Country Measures”; “Digital Cash Transfers in Times of COVID-19: Opportunities and Considerations for Women’s Inclusion and Empowerment”). - Financial inclusion and mobile money infrastructure, interoperability, and regulation (examples: GSMA publications; “Mobile Payments Infrastructure Access and Its Regulation: USSD”; “Interconnecting Mobile Money Providers: Why is Interoperability Testing so Important?”). - Central bank digital currencies and national digital payment initiatives (examples: “Project Sand Dollar: A Bahamas Payments System Modernisation Initiative”; “Presentation: Bahamas – Project Sand Dollar.”). - Gendered dimensions of digital finance and inclusion of women (examples: “Enhancing Women’s Economic Empowerment Through Digital Cash Transfers - Digitize/Direct/Design: The D3 Criteria”; “Mobile Phone Ownership and the Uptake and Usage of Digital Financial Services by Women in an Emerging Economy”). - Digital ID, data, and governance for delivering benefits and emergency transfers (examples: “Guidance on Digital ID”; “Reaching Households in Emerging and Developing Economies: Citizen ID, Socioeconomic Data, Digital Delivery”). - Consumer protection, customer risk mitigation, and safeguarding customer funds (examples: “Safeguarding Mobile Money: How Providers and Regulators Can Ensure that Customer Funds are Protected”; “Doing Digital Finance Right: The Case or Stronger Mitigation of Customer Risks”; “Understanding How Consumer Risks in Digital Social Payments Can Erode Their Financial Inclusion Potential”). - Anti-money laundering, illicit finance, and security concerns in digital payments (examples: FATF: “Statement by the FATF President: COVID-19 and measures to combat illicit financing”; INTERPOL: “Mobile money and organized crime in Africa”). ### Key institutions, publications, and country examples - Institutions and initiatives cited: Alliance for Affordable Internet (A4AI); Alliance for Financial Inclusion (AFI); Consultative Group to Assist the Poor (CGAP); Central Bank of Bahamas (CBB); GSMA; Financial Action Task Force (FATF); G2Px; World Bank; IMF (including Monetary and Capital Markets and Asia and Pacific Department papers); OECD; ITU; INTERPOL. - Notable country-specific cases and briefs: Bahamas (Project Sand Dollar); Zambia; Colombia (DaviPlata); Jordan; Peru; Colombia (G2Px country briefs); Kenya; Rwanda (IMF Country Report No. 20/207); Ecuador; Togo (Novissi). - IMF and World Bank thematic products and series referenced: IMF, Asia and Pacific Department Paper No. 19/14; IMF, Monetary and Capital Market Department Paper No. 20/09; IMF Special Series on Fiscal Policies to Respond to COVID-19; World Bank blogs and Focus Note No. 103; World Bank Other Operational Studies 24568. ### Policy focus areas and operational topics covered by the cited works - Designing and scaling digital G2P payment systems and expanding customer choice. - Operational considerations for agent networks and their support during COVID-19. - Interoperability and API standards for mobile money; the need for testing and implementation guidance. - Protecting customer funds, mitigating customer risks, and regulatory recommendations for mobile money. - Inclusion of informal economy and women in digital financial responses. - Use of digital ID and socioeconomic data to reach households in emerging and developing economies. - Guidance on digital solutions for emergency cash transfers and key considerations for emergency social assistance payments. - Fintech strategy for specific regions (example: Pacific Island Countries) and the promise of fintech for financial inclusion in the post COVID-19 era. - Taxation of mobile money and its causes and consequences (example: “The causes and consequences of mobile money taxation: An examination of mobile money transaction taxes in sub-Saharan Africa”). ### Representative document identifiers and years (as cited) - IMF, Asia and Pacific Department Paper No. 19/14 (Davidovic, Loukoianova, Sullivan, Tourpe. 2019). - IMF, Monetary and Capital Market Department Paper No. 20/09 (Sahay et al. 2020). - IMF Country Report No. 20/207 (Rwanda: Request for Disbursement Under the Rapid Credit Facility; 2020c). - CGAP Focus Note No. 103 (McKee, Kaffenberger, Zimmerman. 2015). - World Bank Other Operational Studies 24568 (Zimmerman, Baur. 2016). *Source: wpiea2020198-print-pdf - References* ### APPENDIX 1: KEY ENABLERS MATURITY MAP ### APPENDIX 1: KEY ENABLERS MATURITY MAP ### A. Beneficiaries - Eligibility Criteria - Minimum Required: Broad eligibility criteria easy to identify, communicate, and implement. - Good-to-Have (Enhanced Scenario): Additional criteria, such as number of children in household, and labor type, if available, allow more targeted transfer program. - Great-to-have (Advanced Model): Ability to include/exclude certain segments, e.g., based on income level; articulation with other government benefit programs. - KYC Requirements - Minimum Required: Any form of identification, even not government-issued (tax records, utility bills, health records). Authentication to access mobile wallet often uses PIN numbers (often used in G2P programs). - Good-to-Have: Any standardized government identification, such as a voter card, birth certificate, or driver’s license. Accept MMOs’ KYC and authentication schemes (e.g., Brazil, Jordan) with certain limits. - Great-to-Have: National digital ID, with streamlined, secure registration (e.g., Aadhaar in India). Biometric authentication offers additional security. Example: In Pakistan, biometrics promoted use of mobile wallets by women living in poverty. - User Experience - Minimum Required: Most countries have maintained web sites to answer key questions. Messaging tools such as WhatsApp in Kenya have helped provide basic support service. Mobile wallets typically use well known USSD mobile wallet (Box 2). - Good-to-Have: Countries have worked with MMOs and banks to offer user support. - Great-to-Have: Smartphones are able to provide superior mobile wallet experience, biometrics authentication, and contactless payment. Note: USSD should remain for hardest to reach populations. - Typical Risks to Mitigate - Financial exclusion from the inability to demonstrate identity. - Forgery of identification documents. - Inconsistent data across sources. Identity theft. Cyber-crime. - A Country’s Journey (Uganda, SAGE) - 2011: Government implemented SAGE (Social Assistance Grants for Empowerment). - Two eligibility approaches: index based on demographic indicators for ‘Vulnerable Households’; strict age-based for senior citizens. - Transfer: 25,000 Ugandan shillings (about USD 10 at that time) per month paid every two months. - Pilot outcome: Over 4 years reached about 125,000 households and about 560,000 individuals. - Registration: Census-style registration; beneficiaries provided a SAGE ‘program card’ (embedded with a SIM card from MTN); withdrawal at designated pay point with card and identification. ### B. Government Digital Tools - Social Registry - Minimum Required: Use existing registries, complemented with online self-registration and community-based identification (e.g., local authorities). - Good-to-Have: Require additional KYC requirements. Avoid duplicates and “ghosts” by leveraging other databases (e.g., other benefit programs, social security, tax administration, utilities, school, NGOs, and MNOs databases). - Great-to-Have: Up-to-date and integrated socioeconomic data that allows fully automated validation of self-enrolled individuals by cross-checking reliable internal and external databases. See Appendix 3 for useful technologies. - Standards and Open Architecture - Minimum Required: Assuming data exists – 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. - Good-to-Have: G2P and beneficiaries’ data is accessible programmatically and securely across public agencies, and with external partners such as MMOs, via APIs, boosting operational effectiveness and reducing human mistakes. - Great-to-Have: An open architecture supporting any G2P cash program is used securely, allowing the private sector, such as fintech, research agencies, third parties to provide additional services. - Streamlined controls and effective procedures - Minimum Required: Identify sources of inefficiencies and overcomplicated processes, procedures and workflows that would delay G2P program. - Good-to-Have: Eliminate unnecessary steps, decisions, intermediaries to improve G2P program delivery. Mitigate risks of such simplification with data collection and reporting from all framework participants. - Great-to-Have: Predictive analysis can improve performance (e.g., a segment more likely to withdraw on a certain day to improve liquidity management) or reduce risks (e.g., agent transaction patterns that flag suspicious activity) by suggesting key 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 leaks may reduce trust in G2P program. - Some people may be missed, others may be paid more than once. Cyber-crime. Biased algorithms. - A Country’s Journey (North-East Nigeria, CRS) - 2014: Catholic Relief Services explored electronic voucher schemes; paper vouchers subject to fraud and duplication. - 2016: Launched Cash and Assets Transfer (CAT) Management Platform with web-based management, Android apps, NFC, biometric scanners, smart cards. - Transfers: pushed monthly to smart cards (roughly USD 5 to 6). - Reach: Supported roughly 83,000 beneficiaries and involved over 180 vendors. - Outcome: Reduced fraud and increased satisfaction compared to direct cash payout. ### C. Mobile Money Operators (MMOs) - Quality of Services - Minimum Required: Partnership with one mobile money operator with proven ability to deliver mobile money to a large segment of population. Account opening is straightforward and free. - Good-to-Have: Data about subscribers and usage can be obtained from MMOs, preferably automatically via secure APIs. MMO can provide additional financial services accessible with G2P money (e.g., savings account). - Great-to-Have: Beneficiaries can select their MMOs, which are interoperable, allowing movement of funds between mobile wallets and with bank accounts. - Agent Networks Coverage - Minimum Required: Agents offer cash-out services in rural areas. They should have access to liquidity. They help first-time users navigate basic USSD menus. - Good-to-Have: Agents conduct basic KYC and offer account-opening services. Service is available late and on weekends to flatten peak hours crowd curves. Agents answer basic G2P questions on behalf of government. - Great-to-Have: Experienced and dense agent network in remote rural areas. Good liquidity management. Agents can explain basic financial services such as saving accounts. - Mobile Coverage - Minimum Required: 2G and 3G mobile coverage is available in majority of the country. - Good-to-Have: Service is reliable and affordable. - Great-to-Have: Available to remote areas such as mountainous regions, small islands, or low-density areas. Affordable or subsidized for poorest population. - Typical Risks to Mitigate - Population hard-to-reach physically, economically, culturally (e.g., 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. - Notable Fact - In February 2020, Pakistan started to distribute free smartphone and biometrically-protected bank account to seven million poor women. - A Country’s Journey (Tigo, Tanzania) - 2010: Tigo deployed a mobile wallet to 12 million users (about half of its base of voice and data subscribers). - Features: real-time account activation, cash advance services (through a local bank), international remittances, merchant payments integrated with Mastercard’s Masterpass QR. - Agent network: over 150,000 agents, many in rural areas; strong agent recruitment, training, liquidity services. - Impact: As of 2019, Tigo Pesa contributed nearly a third of overall earnings for Tigo Tanzania, estimated at roughly USD 40 million. ### D. Financial Institutions - Branches and ATM Safety - Minimum Required: Partnership bank(s) capable of partnering with MNOs to provide mobile money. Bank(s) should have reasonable ATM coverage in both urban and some rural areas, and effective liquidity management. For all 3 phases, social distancing should be mandated. - Good-to-Have: Branches are available in some rural areas and have flexible operating hours to avoid large crowds. G2P partnership is open with all banks in the country which comply with governments’ criteria. Most operations other than cash-out are done over the internet or telephone. - Great-to-Have: ATMs are functional and liquidity and appointments are managed via predictive analytics and other automation technologies to avoid long lines. Personnel at branches is well trained and can provide G2P and financial advice. Services supported by interoperable platforms with MNOs. - Ease of Doing Business, Trust - Minimum Required: Brand is recognized by many beneficiaries, and is not distrusted. - Good-to-Have: Brand is recognized and trusted by most beneficiaries. Customers feel comfortable interacting with branch staff. - Great-to-Have: Brands of participating banks are strong; recognized by the majority of the population and trusted to provide high quality of service, including internationally. - Risks Management - Minimum Required: Participating bank adheres to basic internal controls to detect, prevent, and correct threats, particularly financial fraud. - Good-to-Have: Enhanced controls in place, such as best practices in accounting system access controls, standardized financial documentation, separation of duties, reasonable AML/CFT/KYC controls. Example: Peru improved processes to avoid losing fund when cash is not withdrawn by the intended beneficiary, or not at all (G2Px, 2020b). - Great-to-Have: Robust internal controls in place, including frequent risk assessment and pro-active risk monitoring (e.g., 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. Need for clear and quasi-real time reporting on G2P money flows. Cyber-readiness of banks’ technology, processes and personnel. - A Country’s Journey (Peru, BIM) - Several large banks created the ASBANC committee to promote a low-cost banking service for unbanked and underserved population via an interoperable platform. - 2012: Policymakers enabled non-banks to issue electronic money. - BIM: Fully interoperable national mobile money platform supported by financial institutions, government, and telecommunication companies. - As of December 2019: registered 1.3 million transaction per month. - Government is extending COVID-19 stimulus through the platform to old and new beneficiaries (Rutkowski and others, 2020). ### E. Cash-out Network - Delivery Channel Mix - Minimum Required: Many channels of distribution (banks, ATMs, post offices, cash-out agents). Government-owned channels staffed to cope with emergency disbursement. - Good-to-Have: Countries coordinate or regulate efforts across delivery channels to minimize long lines, and better manage liquidity. - Great-to-Have: Large share of cashless economic transactions with people needing/wanting less cash. Example: Malaysia uses GrabPay; 70% spent their money to pay GrabPay merchants without cashing-out. - Liquidity Management - Minimum Required: Financial institutions and government-owned channels maintain adequate cash reserves to meet demand for cash withdrawals. - Good-to-Have: Coordination across channels, communication to beneficiaries, scheduling of time slots to lower risk of long lines and liquidity issues (e.g., Peru). - Great-to-Have: Merchant acceptance of mobile money greatly reduces need to cash-out, simplifying liquidity. - Trained Personnel - Minimum Required: Countries have tried to adequately train personnel at main access points to answer G2P questions and provide basic redress mechanisms. - Good-to-Have: All personnel across participating channels should be trained adequately. Internal checks for government personnel who do not typically handle cash. - Great-to-Have: Well-designed products (mobile apps, updated web sites, SMS alerts) limit need to interact with cash-out personnel; 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 effectiveness of some technology solutions. - A Country’s Journey (Colombia, Daviplata) - 2011: Banco Davivienda created Daviplata mobile platform to disburse money to lower-income households. - Complemented 600 branches and 1,600 ATM network with 5,000 stores access points (2.5 times more access points than direct channels). - Within 3 years, agents covered over 700 new municipalities previously not served by branches and ATMs. ### F. Payment Acceptance Network - Mobile Money Life Cycle - Minimum Required: Some “essential” businesses (water, electricity, grocery, pharmacy) are registered as merchants and accept mobile money for P2B services. - Good-to-Have: Wider merchant acceptance. Some government services accept mobile money, paving way to P2G payments (e.g., taxes, public transportation, schools). - Great-to-Have: Most micro and small businesses, including informal ones, are registered (local market vendors, taxi drivers, bars and restaurants, convenience stores). Businesses can use same platforms to transact B2B and B2G. - Fee Structure - Minimum Required: For essential services, countries have waived fees for registration and transactions, and lowered charges for ‘essential’ merchants, for a fixed period. - Good-to-Have: Countries have waived charges for customers and lowered or waived for small-value transactions (e.g., under $10) across a wide range of merchants for a fixed period of time. - Great-to-Have: Fees applied strategically to aim for localized goals (e.g., Kenya applied tier fees to encourage MNOs to provide services in underserved regions). Taxation of mobile transactions should aim at avoiding creating arbitrage (GSMA, 2020c). - Payment Platforms and Interoperability - Minimum Required: A merchant registered under a certain mobile money scheme can accept payments from a beneficiary from any other mobile money scheme (one-to-many). - Good-to-Have: A merchant registered under any mobile money scheme can accept payments from any other mobile money scheme (many-to-many). - Great-to-Have: A merchant registered under any payment (mobile money or bank) scheme can accept payments from any other payment scheme (many-to-many and across schemes). - Typical Risks to Mitigate - (Ellipses in source denote unspecified additional points.) - A Country’s Journey (Zimbabwe, EcoCash) - June 2018: Econet Wireless launched EcoCash merchant payments business. - Context: Persistent shortages of physical cash; central bank promoted cash-lite economy. - Product: Ecocash Business Wallet for businesses with higher transaction limits (up to roughly two to three times, depending on size of business) and insurance coverage; eligible to all businesses, formal and informal; services include payroll and supplier payments. - Access: Separate USSD shortcode works on 2G handset; smartphone app also developed. - Interoperability: Currently no interoperability with other mobile money schemes (EcoNet owns most market). - 2018: EcoNet enabled consumers to pay with card-based schemes through Mastercard’s Masterpass QR at roughly 3,800 merchants. Integration with bank-based POS terminals not yet occurred. ### G. Business Model Elements - Program Features - Minimum Required: Minimal one-time, unconditional electronic transfer for easily identifiable beneficiary segment. Transfers often fixed amount, set frequency, and defined duration. - Good-to-Have: Transfer amounts vary by beneficiary segment (e.g., employment type, gender, age) using up-to-date data. Duration tied to measurable impacts, market conditions and crisis context supported by trustable data. - Effective and Frequent Communication - Minimum Required: Key features documented on websites and media: beneficiary eligibility, documents and requirements (including conditions), transfer amount and frequency, and how, where, and how quickly funds will be transferred. - Good-to-Have: Additional financial education and marketing collateral developed, including at key cash-out access points. Basic customer support by USSD to check balances and last transactions. - Great-to-Have: Marketing and customer support available in local languages and local authorities. Extensive customer support to address queries and resolve disputes. - Program Management - Minimum Required: Basic processes, procedures, and reporting across government, bank, MNO, and intermediaries for effective transfer. - Good-to-Have: Tactics for effectiveness and risk reduction (vetted stakeholders, sufficient liquidity). Develop and control deadlines and budgets. - Great-to-Have: Optimize performance by continuously aligning objectives of stakeholders, frequently sharing operational data and best practices, recommending business model adjustments, and proactively identifying and mitigating risks. - A Country’s Journey (Togo, National ID and Novissi) - 2019: Togo began a digital National Identification Program for citizens and non-citizen residents, including those without birth certificates; biometrics to ensure unique counts; central registry holds data of all of its 7 million plus citizens and residents. - e-KYC being established to facilitate digital identity verification. - COVID-19 response: G2P program Novissi with monthly transfers of 10,500 CFA (about USD 18) for men and 12,250 CFA (about USD21) for women, and close to USD 35 for motorbike taxi drivers. - Eligibility and registration: Clear communication (e.g., being 18 years of age, both citizens and residents eligible). ID requirements: voter card is sufficient. Registration by simple USSD code across all networks (*#855), and general customer inquiries via toll-free number 855. ### H. Digital Inclusion Foundations - Role and Scope - The three enablers below are out of reach and out of scope for a G2P Program but require close coordination with stakeholders to: - Further define and prioritize the business model (building block 7) and policy and regulation (building block 8). - Coordinate work with other government agencies to maximize the impact of mobile G2P payments. - Boost the impact of mobile platforms beyond G2P (see section II). - Digital Access and Affordability - Minimum Required: Working with MMOs' data and government agencies in charge of infrastructure and digital inclusion, G2P program managers can identify where mobile G2P is and is not implementable in the short term and adapt the program accordingly. - Good-to-Have: Many countries rapidly mandated internet and energy providers to ensure availability and affordability of services during the pandemic (Panama, Argentina, Chile, Malaysia, Vietnam, Qatar). - Great-to-Have: All countries suffer from some level of domestic digital divide due to affordability, internet and electricity coverage or education. The Enhance Digital Access Index (Alper and Miktus, 2019) described in (text truncated in source). *Source: APPENDIX 1: KEY ENABLERS MATURITY MAP (wpiea2020198-print-pdf)* ### Appendix 3 in one of the tools available to ### Appendix 3 in one of the tools available to measure and reduce digital divide ### Gender Gap - Stakeholders should assess the possible negative impact of digital payment for women in EMDEs, given that (i) they represent a large portion of the informal sector, and (ii) digital divide between genders has been widening in the past 7 years (ITU). - 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 (WBG, 2020b). - The opposite is unfortunately true: in Togo and Pakistan, mobile G2P have explicitly targeted impoverished women. - The D3 framework (Digitize, Direct, Design) from Chamberlin, Kellison, Klugman, Zimmerman (2019) can serve to design mobile G2P for women's economic empowerment. ### Typical Risks to Mitigate - Digital exclusion of the population hardest to reach physically, economically, and to literacy perspective. - Gender gap in financial access. ### Role of Technology in G2P Mobile Payment (context from Appendix 3) - The framework can help understand the role of specific technologies for each building block. - Most of these technologies already exist and are being used in almost all countries. - Understanding where and when to use this expertise is key to maximize impacts and minimize risks of G2P mobile payment and to accelerate the maturity of such a mobile environment. ### Cross-references and related frameworks (as cited) - D3 (Digitize, Direct, Design) — Chamberlin, Kellison, Klugman, Zimmerman (2019). - G2Px framework and the "Mobile Money Account" component — G2Px (2020d). - Evidence on gender empowerment benefits — WBG, 2020b. - ITU evidence on gender digital divide widening in the past 7 years. ### Appendix 4: Variables used in the Enhanced Digital Access Index (EDAI) - EDAI is composed of variables selected for their representation of digital connectivity across countries (as defined in Alper and Miktus (2019) and further refined in the IMF’s REO Chapter 3 (IMF, 2020)). - Note: Variables were selected based on the following criterion: at least one observation for each variable is available during one of the previous three years leading up to the year for which the index is being calculated. When a given economy has more than one observation for a given variable, the latest data point is selected. - The variable “Percentage of the population covered by at least an LTE/WiMAX mobile network” was dropped for 2010 as LTE/WiMAX was still an emerging technology. - The indicators are aggregated using the Adjusted Mazziotta-Pareto Index (AMPI) methodology. - Footnote reference: 35 *Source: Appendix 3 (and adjoining appendices) from wpiea2020198-print-pdf.* --- _Source: https://www.imf.org/-/media/files/publications/wp/2020/english/wpiea2020198-print-pdf.pdf_