New Trends in USAID Procurements
The transition towards e-Payments
April 9, 2013
1
What we will cover today
Agenda
1. Introductions
3
2. USAID’s Commitment to e-Payments
4
3. USAID Tanzania: Mission Perspective on e-Payments
11
4. Assessing viability of e-Payments
19
5. Practical Tips for Implementation
22
6. Q & A/Upcoming Events
28
2
Introductions
Nandini Harihareswara
Operations Director & Sr Partnerships Officer
Nya Kwai Boayue
Acquisition and Assistance Specialist USAID/Tanzania
Hamilton McNutt
Program Manager, Payment Innovations
Anthony Latta
Treasurer, Finance and Administration
Svitlana Hall
Operations Associate, Finance and Administration
3
USAID’s Commitment to e-Payments
4
Why USAID Supports e-Payments
1
Foster cost savings and improve aid efficiency
Increase transparency and reduce leakage
and waste
2
3
4
5
Reduce security risks to program staff
Improve access to financial services for the
poor and unbanked
Catalyze development of new and innovative
financial products for the poor and unbanked
5
USAID’s Commitment to e-Payments
Direct funding and support to
technical assistance programs and
partnerships fostering the
development of e-payments
Tools and
trainings to assist
partners in
choosing
payment
platforms
Encourage the
transition to electronic
payments (including
mobile money) in
USAID programs and
operations where
appropriate
Development
of a system to
track the
usage of
electronic
payments
E-payments
incorporated into
project design,
procurement
language and
existing
measurement
systems.
6
USAID Procurement Executive’s Bulletin
• Evaluate e-payment alternatives, Include e-payments
use in concept papers, applications & proposals, if
appropriate
USAID
PROCUREMENT
EXECUTIVE’S
BULLETIN NO.
2012-05
(7/12/2012)
• Examples of operational costs that can use epayments:(1) temporary staff salaries; (2) vendor
payments; (3) travel per-diems.
• Examples of program costs that can use epayments: (1) cash for work; (2) payments to trainers;
(3) intra-value-chain payments; (4) grants to
beneficiaries.
• Missions can elect to make use of e-payments an
evaluation factor in solicitation documents.
7
The Philippines
ALL SOLICITATIONS FROM THE MISSION ENCOURAGE THE
CONSIDERATION OF ALTERNATIVE PAYMENT METHODS
•
Request for Proposal No. SOL‐492‐12‐000033, Facilitating Public Investment
(12/8/12):
 L.5 ADDITIONAL INSTRUCTIONS TO OFFERORS
(6) Electronic Payments
USAID encourages the Contractor to consider alternative methods of payment,
especially electronic forms of payment, in place of cash payments when appropriate.
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Afghanistan
THE AFGHAN MISSION IS PROMOTING THE USE OF E-PAYMENTS
IN PROCUREMENTS
•
Request for Proposal No. SOL-306-13-00002, Regional Agricultural Development
Program – South (#2) (1/22/13):
 This RFP includes
 the use of electronic payments in the Statement of Objectives
 the ability to address and implement key areas of the Statement of Objectives in
the Technical Evaluation Criteria.
USAID, through the Financial Access for Investing in the Development of Afghanistan
(FAIDA) program and other programs, has encouraged the use of electronic
payments, including mobile money . . . The contractor should utilize these services to
the greatest extent feasible within its company policy to strengthen the efficiency and
security of financial transactions at all stages of value chain activities.
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Haiti
THE MISSION IN HAITI REMAINS A LEADING ADVOCATE OF
MOBILE MONEY
•
Request for Proposal No. SOL-521-12-000021, Haiti Feed the Future Partnership:
Northern Corridor (2/14/12):
 C.6.3.3 SUB RESULT 3.3: INCREASED ACCESS TO FINANCIAL PRODUCTS
…The Contractor shall also explore the possibility of utilizing mobile money technology for
conducting financial transactions (payments for purchases, cash transfers, payroll,
credit disbursements, credit repayments, etc.).
•
USAID/Haiti included language requiring support of mobile money in a
solicitation in 2011:
 The implementer shall support the Haiti Mobile Money Initiative, where feasible,
including the payment of staff, the purchase and sale of goods and services associated
with program implementation. The Mission will determine the range of allowable cost
mobile money services utilized by the contractor/grantee.
10
USAID Tanzania: Mission Perspective on e-Payments
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Tanzania’s Mobile Industry by the numbers
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Source: World Bank/GSMA 2011
Mobile Phones vs. Bank Penetration in
Tanzania
Mobile Telephone vs. Bank Penetration in Tanzania
35000000
30000000
21.5 million
25000000
20000000
15000000
10000000
5000000
0
2004
2005
2006
2007
Depositers with Commercial Banks
2008
2009
2010
2011
Mobile Cellular Subscriptions
13
Source: World Bank Databank
Tanzania: Bank Branches vs. Mobile Money
Agents
18000
17,000
Interviews*
16000
14000
12000
ATMs
10000
Bank Branches
8000
6000
Mobile Money
Agents
4000
2000
1608*
Work Bank
594*
Work Bank
0
2012
*Projected bank branch growth
Source: World Bank 2010/TDY Interviews 2012
* Estimation combines agents
who serve more than one MNO
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Mobile Money Products Available in
Tanzania?
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Areas Of Action
Integrating language
encouraging e-payments into
future solicitations
Integrating the use of epayments in long term
development programs, (e.g.,
Feed the Future, Maternal
Health, Health Systems
Strengthening, etc)
The Mission is focused on moving away from the use of cash for the following
reasons:
• Safety. Program staff holding large amounts of cash going to the field are at risk for
theft or other acts of violence.
• Transparency & Leakages. A high level of cash based payments in programs can lead
to a higher level of leakages. E-payments provides a paper trail.
• Efficiency. By using e-payments, program staff can focus on programmatic work and
Finance/Administrative staff can be more effective with the use of e-payments.
• Scale. Programs, if successful, can be scaled up quickly when using e-payments.
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Areas Of Interest
Agriculture and Work with program technical teams to examine key
payment streams within health or agricultural value
Health
chains that experience pain points with cash
Programs
management
Capacity
building
activities
Encouraging programs conducting intensive capacity
building activities to assess and implement alternative
payment methods for per diem and travel cost
reimbursement disbursed to training attendees
Operations and
Finance
Working with implementing partners to encourage
use of e-payments in the payment of per diems,
travel advances, and other payments made to
program staff that normally occur in cash
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Current Program Integration
The following programs have already begun exploring ways to
integrate mobile money into their programs and operations…
Program
Objectives
Use of e-payments
Tanzania Staples
Value ChainNAFAKA
(ACDI/VOCA)
Improve smallholder
farmer productivity and
profitability within the
maize and rice value
chains
Beginning to evaluate how to
facilitate mobile payments
between small holder
farmers and agricultural
input companies.
Community Health
Workers-Pathfinder
Builds community health
systems in 35 districts in
Tanzania in order to
support a range of health
challenges from HIV/AIDs
to family planning.
Uses M-Pesa to disburse
monthly stipends to 3,500
community health workers
throughout the country.
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Assessing Viability of e-Payments: Costing Utility Tool
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Process for making an informed decision
and the tools to help you get there
1) Where is cash used in my program and my operations, and is it a
problem? Available Resource: Cash Scoping Survey
2) Does the country I work in have appropriate electronic payment
infrastructure and regulatory policy? Upcoming Resource: Country
Wide e payment due diligence guidance
3) Assess provider capabilities and get a better understanding of
products offered. Available Resource: e-Payment service provider due
diligence guidance
4) Analyze the costs associated with cash management vs. a transition
toward e-Payments Available Resource: Cashing Utility Analytical Tool
5) If you do find provider capabilities and clear benefits to your
program, develop an implementation plan and implement the transition.
Upcoming Resource: Standard operating procedure guidance
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Costing Utility Tool Example
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Practical Tips for Implementation: Chemonics
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Establish Internal and External Needs
Internal
External
• Accounting systems
• Record keeping (audit trail)
• Operation procedures
• Mobile Network Operator
vs. Bank
• Selecting a provider
• Access to payment system
MNOs vs. Banks
Country context
Example from
the field:
Philippines
Mobile money vs. mobile wallet
Geographic distribution
Internal – Accounting system
• Ensure accounting system is ready
• Start small and with your staff
Internal – Audit trail
Internal – Operating procedure
Mobile Money vs. Checks
Mobile request
Check request
Approval
Approval
Upload
Payment
Release
Prepare check
Release check
payment
Payment
approval
Payment
confirmation
Sign check
Copy check
Questions and Answers
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Upcoming Events
CRS Webinar on their
experiences with electronic
voucher systems in Haiti
(11am-noon); Info:
fredrik.winsnes@nethope.org
April 11
Replay of the Trends in USAID
Procurements for audiences in
East Africa and South East Asia
(8 am EST); info:
hamilton.mcnutt@nethope.org
April 25
Ask the expert
Twitter Session with
USAID Mobile
Solutions Division
(11am-noon EST);
Info:
nandini@usaid.gov
April 23
May 2
NetHope/USAID Webinar
on lessons from Tanzania
and Uganda in electronic
payments
(8am EST); info:
JChen@qedgroupllc.com
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