Presentation on theme: "Lessons from Basa Pilipinas adoption of m-money payment"— Presentation transcript:
1Lessons from Basa Pilipinas adoption of m-money payment April 2014Manila, Philippines
2USAID Philippines’ mobile payment initiatives Actively works to develop mobile money via two projects.Microenterprise Access to Banking Services (MABS) ProjectScaling Innovations in Mobile Money (SIMM) ProjectSupports the Government of the Philippines’ participation in the Better Than Cash Alliance (BTCA)Supports the Better Than Cash Initiative. Worked to Include “hortatory language” to encourage use of electronic payments in all of the Mission’s grants and contracts
3SIMM Project About Scaling Innovations in Mobile Money 2-year program funded by USAID which started in April 2012Objective is to increase financial inclusion with two inter-connected goals:Boost expansion and rapid adoption of mobile money (m-money) servicesCreate an enabling environment for m-moneyAgreed between Pres. Aquino and USAID Administrator Rajiv Shah in June 2012 in Washington, DCSupports GPH objective of inclusive growth in the Philippine Development PlanSupports USAID objectives for Partnership for GrowthWorking with LGUs and MFIs to use m-money to:Disburse payroll, grants and loans to over 250,000 peopleCollect taxes, fees and loan amortization
4Basa Pilipinas Program About Basa Pilipinas (Read Philippines)A four-year program funded by USAID which started in January 2013The program aims to support the Department of Education (DepED) toward improved reading proficiency for up to 1 million early grade students through:1. Improved Reading Instruction- Train grades 1-3 teachers and school heads on effective reading instructionin Mother Tongue, Filipino and English2. Improved Reading Delivery Systems- Work with DepED to set national reading standards and develop appropriateassessment tools- Support Community Awareness Raising efforts aligned with core programs3. Improved Access to Quality Reading Materials- Develop and distribute appropriate reading and instructional materials- Engage private partners to provide supplementary reading materials
5Basa & SIMM synergyBasa wanted to increase operational efficiency and ensure the safety of administrative staff during the preparation and distribution of cash reimbursements to teacher participants.SIMM with its success in piloting m-money cash disbursement for LGUs and cooperatives provided Basa with an overview of m-money disbursement options in the Philippines and introductions to each provider. SIMM also described their own processes and lessons learned to Basa.Basa designed a process, informed by SIMM’s experience, to distribute travel reimbursements to more than 2,000 teachers in La Union and Cebu. Plans are in progress to reimburse more than 8,000 teachers in the month of May during summer professional development for teachers in Regions 1 and 7. To ensure that teachers are supported throughout the reimbursement process, Basa also utilized frontline sms to send text blasts to teachers. Through text, Basa was able to troubleshoot payment issues, survey teachers’ reactions to the technology, and offer opportunities to answer questions.
6Cash handling pain points ConsumerInstitutionRisk of theftPhysical cash is exposed to risk of theftAccessSavings services are not easily accessibleCostlyTransportation and insurance cost for manual handling of cash from bank to office/recipientsOperational inefficiencyManpower costsHuman error in counting cashTime consumingRisk of theftManual handling of cash poses threat of theft or leakage
7M-money benefits Consumer Institution Cost-Effective Efficient ConvenienceCan transact anytime, anywhereCan withdraw in over 10,000 Bancnet / Megalink ATM and over to 12,000 cash merchants nationwideCost-EffectiveCheapest way to send money to family and friendsGives 10% rebate on purchase of pre-paid airtime creditsCan save on transportation cost and opportunity costs in making bills paymentSecureRequires M-pinGenerates electronic receipt as proof of transactionAll transactions have electronic recordsEasy access to savings servicesMobile wallets can be linked to savings accountsCost-EffectiveEliminates paper workNo ADB or maintaining balance requiredEliminates cash handling costsEfficientStreamlines back-end process for disbursementQuicker and more accurate management reportsSecureRequires two step approval (maker and approver)Transaction logs are easily accessible from web portalTransparentAll transactions have electronic trailPromotes Transparency and AccountabilityMinimize misuse of funds as payments are credited directly to bank account—no manual handling of cash
8Mobile Money Providers M-money providers (MMP) in the PhilippinesMMPs presented their respective m-money disbursement products to Basa, after which Basa selected BPI Globe BanKO’s productBPI Globe BanKO is a virtual bank with its mobile wallet linked real-time to a savings accountBasa and BPI Globe BanKO signed a partnership agreement to implement the projectBPI Globe BanKO provided Basa with:- training on disbursement using BanKO’s web access ,000 Globe sim cards- 2 batches of end user trainings ,000 ATM cardsWith savings resulting from lower cash handling costs, Basa is able to subsidize cost of cash-out and ATM withdrawal fees for teachers
9Payment of reimbursement prior to mobile money For a 3-day Basa training for up to 500 teachers, manual cash disbursement required a minimum of 5 finance staff on site working for a total of 250 man-hours (5 days at approximately 10 hours per day) to take care of the following tasks: - Withdrawal of funds from banks in small currency- Counting of money for each participant after review of claims and filling envelopes- Distribution of funds to teachers- Liquidation of all funds received- Other admin/finance tasks such as distribution, collection and review of transportationclaims, verification of attendanceWith mobile money cash disbursementFor a similar training (3 days for up to 500 participants), on site finance staff requirements have been reduced to 2 staff working 5 ten-hour days, for a total of 100 man-hours for mobile money payment processing, including other admin and finance tasks. The security risk is eliminated as staff no longer travel to remote locations with large quantities of cash.
11Process Flow Disbursement (Recurring) Teachers with Mobile Money SubmitExpenseReportApprovedisbursementThrough MMPWeb AccessTeachers withMobile MoneySubmitVerifiedReportUpload account numberand amount to disburseto Web access of MMPTechnicalFinanceCOP
12Lessons LearnedStakeholder consultation is crucial prior to switching to m-money payments to avoid resistance in adoption.The program should make it clear to the MMP early on about the potential scale of the service required in terms of no. of payees, frequency of disbursements, and amount of payments for easier appreciation of the business case by the MMPs. Depending on the scale, the program can negotiate better deals.Program should give sufficient lead time from contracting period to actual implementation. This is usually 1-2 months, depending on the MMP.Program should conduct pre-activation with MMP prior to program training or event to fully accommodate the volume of beneficiaries. Pre-requisites include complete and accurate data of beneficiaries for m-money account opening purposes, and adequate mobile network signal. Internet access is also preferable.MMP should customize end user training according to beneficiaries’ needs, i.e. highlighting best savings interest rate in the market to drive interest in the other m-money services available.Ensure after-sales support is well-established by the MMP and that other actors, i.e. DepEd superintendents, are also informed or trained about the service.
13Quote“The use of mobile money is amazing. We didn’t face danger anymore in carrying cash, and we no longer count money and place them in envelopes. We also incurred savings because of minimized involvement of support staff.”Loreta Villones, Finance ManagerBasa Pilipinas Program
14ActivitiesPublic school teachers participating in a Basa Pilipinas training learn how to use a BPI Globe BanKO account in Cebu City on February Basa Pilipinas Program and SIMM Project are partnering to make disbursement of travel reimbursement of teachers more efficient and convenient through mobile money.
15Thank you For more information, please contact: Basa Pilipinas Program Mr. Lee MarshallDeputy DirectorOffice of EducationU.S. Agency for International DevelopmentAnnex 2 Building, U.S. Embassy1201 Roxas Boulevard 1000Ermita, ManilaSIMM ProjectMs. Maria Teresita EspenillaProject Management SpecialistOffice of Economic Development and GovernanceU.S. Agency for International DevelopmentAnnex 2 Building, U.S. Embassy1201 Roxas Boulevard 1000Ermita, Manila