The MasterCard Aid Network is an end-to-end, non-financial service designed to streamline aid distribution even in the absence of telecommunications infrastructure. The platform is being used by Save the Children in Yemen to increase food security. Photo by: MasterCard
Exciting new advancements in digital and mobile technologies are benefitting the operations and opportunities of corporations around the globe. And they can do the same for people around the world in humanitarian crises.
To quickly get food, medicine and other supplies to millions of children and families struggling to survive a humanitarian disaster or crisis, humanitarian organizations have to overcome a variety of logistical challenges. Nonprofits like Save the Children are partnering with the private sector to develop alternative methods of delivering fast, secure and effective humanitarian assistance for children in need.
One exciting option is the use of digital payments to deliver lifesaving assistance. Originally piloted in our emergency food security and livelihood programming and expanding into other technical sectors, digital payment systems streamline aid distribution while supporting local markets — even in areas that lack telecommunications infrastructure.
For example, we are working with MasterCard to increase food security in Yemen through the MasterCard Aid platform. Formally launched last month, the MasterCard Aid Network uses a chip-enabled card, similar to a debit card, rather than paper vouchers.
Here’s how it works: Save the Children staff work with communities and vendors to familiarize them with using a secure chip-enabled card. Program participants take the cards to participating merchants who have been provided a user-friendly terminal. As the participant dips the card into the terminal, a picture menu of goods pops up for them to choose from. The person taps the corresponding photos on the screen, enters a PIN code, confirms the transaction, and then receives the goods from the merchant.
This delivery method and others like it are more efficient than previous distribution methods because they can be rapidly deployed and easily monitored. Using electronic vouchers reduces the time required to reconcile paper-based systems that then can be spent on monitoring the program to ensure aid is distributed equitably and meeting the needs of the participants.
As electronic vouchers do not deal with physical cash, this method allows us to provide aid in remote areas where financial institutions or mobile money providers are not available.
The system can work even when offline so merchants don’t need constant connectivity in order to conduct transactions. Flexibility in the Internet connection allows the system to be deployed in remote locations where Internet is spotty.
New methods making an impact
The best reason to deploy this new delivery method comes from the feedback we get from participants who say they feel a greater sense of empowerment and dignity than they do in other aid programs that involve distribution lines and public displays of assistance.
Transitioning from paper-based transactions to electronic transactions is not just a focus for development organizations but increasingly, governments are implementing these technologies as well in the name of increasing financial inclusion.
For example, the government of Sierra Leone recently announced that it joined the Better than Cash Alliance, a partnership of governments, companies, and international organizations working together to promote the transition from cash to digital payments to reduce poverty and drive inclusive growth. Sierra Leone’s finance minister said the government hopes the move will aid in the response of economic recovery following the Ebola crisis.
The resources and technological savvy that companies like MasterCard can bring to bear in partnership with the program expertise of development organizations have great promise to further develop electronic vouchers in different contexts. So far, the results are encouraging.
Advancements made in electronic vouchers through chip-enabled card systems are significantly improving the efficiency of humanitarian aid delivery to reach more children with the same level of investment.
But even the best voucher system will not go far enough without the full backing of the U.S. Congress. Successful outcomes from pilots like MasterCard Aid should encourage Congress to continue modernizing the U.S. food aid program by allowing new tools, such as electronic food vouchers, to replace slower and more costly methods of delivering humanitarian assistance.
Meanwhile, the private sector should redouble its efforts to partner with development organizations and develop new innovations to ensure the world delivers on the new set of Sustainable Development Goals that will improve human development and equity.
As our alliance with MasterCard illustrates, these partnerships will help save more children’s lives and more quickly restore the economic viability of the world’s communities in crisis.
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