How digitalisation can be further used to improve public disbursement programs

Azrin Azlina Anuar , Head of Visa Government Solutions, Asia Pacific

For millions of people and businesses across Asia, government assistance was a welcome relief to ride through the early days of the COVID-19 pandemic. However, despite accelerated digitalisation, governments continue to grapple with issues and inefficiencies that hinder getting the assistance, such as fuel subsidies, consumption vouchers, unemployment subsidies, humanitarian relief, and other assistance to vulnerable sectors of society. The pandemic served up a hard lesson for governments to adapt to new challenges and the evolving needs of citizens.

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In Visa’s new report with Kearney , we explored how digitalisation has been and can be further used to improve public disbursement programs. We have found that the more efficient and effective public disbursement programs are built on three key themes—digital identification to instantly verify eligibility, mobile information and application for communications, and scalable digital payment infrastructure for faster and more transparent disbursements. Asia Pacific is well positioned to benefit from its accelerated digitalisation with: (a) Smartphone penetration among internet users being very high across the region, ranging from 98.8% in Thailand to 81.7% in the Philippines [1], and (b) 69% of consumers in the region having used at least one digital payment method recently.

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Below are some notable examples in Asia Pacific on how public sector digitalisation has elevated the citizen interaction and enhanced their experiences with governments to enable quicker disbursements of funds.

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(1)??Singapore: Accessibility is heightened with technology such as mobile payment apps

Across 2020 and 2021, the Singapore government launched several support grants targeted at providing financial assistance to lower-to-middle-income individuals who were experiencing difficulties due to the pandemic. To make the application, assessment, collection and redemption of government assistance easier and more convenient, a specially built GovWallet e-platform was used, which provided options across all payment channels by allowing people without bank accounts to access government disbursement programs, for example, through ubiquitous mobile payment apps.

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(2)???Nepal: Public-private partnership to drive innovative disbursement solutions

Collaboration with the private sector (payment providers, technology companies, merchants) allows government agencies to tap into innovations that can enhance the program. In Nepal, the Rahat platform was used to aid distribution in far-flung areas by using mobile-based blockchain tokens. Even in the most vulnerable and difficult-to-reach communities, the recipients can redeem these tokens for cash or when making purchases, either through a digital wallet, a QR code, or even a merchant’s mobile app.

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(3)???Bangladesh: Digitalising the whole disbursement chain for tomorrow’s needs

The disbursement programs of the future will require governments to accelerate their digitalisation efforts. Since 2015, the digitalisation of the national ID and social assistance payments allowed Bangladesh to disburse COVID-19 assistance quickly. It also saw accelerated financial inclusion through the opening of over one million new mobile financial services accounts, particularly among women.

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There are various ways in which digital disbursements can be made. Among the three options are: (1) Real-time payments; (2) Prepaid cards; and (3) Direct bank transfers.

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(1)??In 2013 after Typhoon Haiyan, Oxfam and Visa combined our expertise in finance and disaster response to create a prepaid card that could be easily distributed to get funding to the affected communities quickly during crises. 2,700 prepaid cards were distributed to vulnerable families in disaster-affected communities in the Philippines.

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(2)??In India, Visa championed for enabling wage disbursements to the low income and underserved by partnering with ICICI Bank to issue PayDirect Visa prepaid cards, which were reloadable and used by enterprises for salary payouts, reimbursements and incentives to employees.

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(3)??At Visa, we are simplifying how people move money and removing the physical barriers of traveling to a location to receive money. Leveraging the global reach and scale of Visa’s network, Visa enables cross-border payments to more than 180 markets. Visa supports fast funding to enable consumers, businesses and governments to send money directly to a bank account, card or digital wallet seamlessly and conveniently.

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Timing, cost, available digital infrastructure, and policy goals are among the factors to consider when weighing the pros and cons of different options. Ultimately, it remains that disbursement programs with an enhanced digital strategy can offer governments a promising opportunity to drive efficiency and citizen outcomes. There is a huge opportunity in the next few years to build on the progress made in digitalising disbursements, and collaboration across private and public sectors will be critical to empowering a more inclusive payments ecosystem.

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To learn more about how governments can redesign disbursement programs, we invite you to read the report from Visa and Kearney.

[1] 19 May 2022. Insider Intelligence. Rising smartphone usage paves way for ecommerce opportunities in Southeast Asia .