Article

Regulated e-Payments Provider Assists in Cash Transfer Programs

    Author:
  • Emma Schwartz
  • November 24, 2015
Regulated e-Payments Provider Assists in

The humanitarian community is progressively moving to cash-based assistance via electronic payments (e-payments) in favor of digital, traceable transactions.

Reliable, robust and secure e-payment systems can offer NGOs unprecedentedly efficient ways of managing payments and improving monitoring, auditing and reporting. But there are a lot of providers and systems in the playing field; so how does an NGO go about choosing the right one to meet their needs?

NetHope Payment Innovations works to help NGOs shop the e-payment product market. Last month, the team showcased the sQuid platform, a regulated and highly scalable system for cash transfer programs.

sQuid is the leading independent e-payments issuer in the UK, with around 250,000 active accounts. The company also has operations in Nairobi, Kenya, where it coordinates work with aid agencies, NGOs and government bodies. During a Solutions Center webinar, sQuid CEO Adam Smith explained how the processing power of its core payments platform enables cash transfer programs and other smart applications to benefit NGOs.

sQuid offers a unique, non-bank e-payments platform that providers users with a multi-wallet digital smart account available online and/or via a smart card. The contactless smart card can be used to purchase goods and services from merchants who accept sQuid e-money payments. Multi-wallet functionality allows program administrators a high level of control in determining how payments are made available to beneficiaries.

sQuid currently uses an Android terminal which can function both offline and online. The sQuid host resides on a server in the UK and is accessed via secure web connections. The system is internationally approved by regulatory bodies and government agencies.

“We built our system to be entirely compatible with central bank requirements for money systems,” shared Smith. “... As the sector makes a greater shift towards payments, I think we can expect to see longer duration systems perhaps becoming bigger in scale and therefore regulatory considerations might need to be on an NGO’s agenda.”

The sQuid team gave a video demonstration of how to use an Android to complete a sQuid registration application on-the-fly, effectively setting up a beneficiary to a smart card with digital accounts linked to the host system. sQuid also gave a video demonstration of a payment application to show the ease of conducting a purchase transaction once a smart card beneficiary has received top-up value. Merchants can use their Android devices to see how many transactions have taken place in a day. This transactional data, secure and encrypted, is sent to the host system, at which point program administrators can: 1) view the data and see the status of their financial system, 2) set up bulk uploads, 3) generate and view reports and 4) create and send dedicated reports via email to specific distribution groups.

sQuid in action

Several NetHope members have leveraged the sQuid payments platform in their work.

Working with Mercy Corps in the DRC, sQuid has facilitated the delivery of payment services enabling 3,000 beneficiaries to receive $200,000+ in distributed funds.

sQuid also develops, deploys and manages its our own interventions in East Africa, working in close association with donors and government. In Kenya, the iMlango program (Swahili for “doorway”) uses the payments system to monitor attendance, delivery technology and improve education in 200 primary schools, impacting over 150,000 children.

Here, Smith and team are also experimenting with non-financial transactions, expanding the platform beyond payments. sQuid has adapted the digital payments system so that students use smart cards to record daily attendance. This real-time analysis capability of events could be useful to others looking to make sure certain events are taking place with target beneficiaries; for example, recording attendance at an antenatal clinic. 

Of particular interest to the sQuid team is how they can start to use data to make conditional payments. For example, using data collected at Sabaki primary school in Kilifi, Kenya, the team has targeted individuals and parents with lower attendance and identified where hunger is a particular issue that seems to be affecting children’s ability to attend school full-time. This data has enabled sQuid to create a targeted program giving these families small monthly food allowances to use at merchants through the sQuid payment system. The first trial period showed an 8-25% increase in attendance, seemingly as a direct association of the targeted payments, a result that holds promise for expanding the system outside of Sabaki.

“Once you’re capturing your information electronically and bringing it into a host system in real time or near real time, you can start to do something close to real time in terms of analysis – whether that’s analysis of attendance monitoring or analysis of payment behavior or how people spend their money – all of that is available from a system like this and in due course enables you to make better decisions as you go forward and run new programs,” said Smith.

sQuid is evolving and developing in response to client feedback. To share your experience or ask questions, please contact Adam at asmith@squidcard.com.

Click here to view webinar collateral and listen to the recording >>

This webinar was facilitated by NetHope Payment Innovations as part of its ongoing effort to support development organizations in finding the e-payments technologies best suited to meet their needs. To view the USAID-NetHope e-Payments Toolkit, Mobile Money Bulk Payments Report, and other key resources, visit http://solutionscenter.nethope.org/communities/payment-innovation.

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