Digital Social Payments (DSP) to the poor are on the rise, with government and development partners increasingly paying cash transfers to the poor into bank accounts or mobile wallets offering financial access to the most vulnerable and excluded community. With all the promise and potential benefits that digitization can offer; digital services have not always been popular with the end user for a variety of reasons. As users have encountered numerous problems when accessing cash particularly those who are new to digital financial services.
Benazir Income Support Program (BISP) is one such example which stands out in the developing world. Government partnered with development partners to provide financial access to the marginalized and trying to create a more financially inclusive society. Even though the intention of the program was well thought out yet crucial considerations when designing the payments were ignored that have led to a whole host of problems.
The target customers where mostly illiterate or semi-illiterate comprising mostly of women who often are left at the mercy of their male relatives. Unfortunately, due to cultural reasons women in Pakistan have limited freedom when it comes to movement outside their homes particularly in the rural areas. Add to this their lack of familiarity with using ATMs and other mobile banking tools, which significantly hampered their access to cash. This meant that they often had to rely on their male counter parts to help them get access to cash. This often meant that women’s full payments designated to them often would not be accessed through the BISP program. These difficulties were also encountered by the male counterparts, who also were troubled while using the often complex digital financial services.
Other reasons also compounded the lack of trust and confidence in the digital financial services being offered, which are as follows:
- Inability to transact due to network downtime or service unreliability;
- Insufficient agent or ATM liquidity;
- Complex user interfaces and payment processes;
- Poor or no recourse mechanism;
- Fraud that targets the recipient.
More often than not in the rural areas or the less developed areas of the country, people would have to spend a significant amount on transport to even reach one of the ATMs or agents. More often than not they would return empty handed due to issues outlined above. So in order to access their designated money they often have to incur significant amount in travel costs often negating the impact that hand-out would have had on the family. So it is no surprise that people often prefer hard cash instead of the digital cash, which also limits their use at different vendors.
Therefore, it is of paramount importance to get the design and deployment of these systems right—finding customer-centric solutions that provide value, reliability, convenience and safety to recipients—should be a priority for any DSP program or provider seeking to unlock the larger potential benefits for the poor.