I recently came across an article entitled “Pakistan: G2P Laboratory” published in CGAP (Consultative Group to Assist the Poor) that described the efforts of government of Pakistan for digitizing a lion's share of its cash flows to its citizens through digital Government-to-Person (G2P) payment services. These services cover distribution of salaries of government employees, pension schemes and social cash transfers monitored by central government agencies and government of Pakistan.
The Benazir Income Support Program
(BISP) initiated in 2008 is an epitome illustration of the largest
digital social cash transfer program operational in the country. However
by 2010 it began employing smart cards (Benazir Smart Card) and mobile
phones. Later in February 2012, BISP shifted to a new payment
mechanism using magstripe debit cards known as the Benazir Debit
Card. The Benazir Debit Cards are issued by six well renowned banks
of Pakistan (five commercial banks and one microfinance bank) and can be
operated conveniently throughout the country’s financial system.
Furthermore, the government of
Pakistan utilized the digital G2P services to transfer cash aid to the
flood-affected families across four provinces and 70 affected districts of
Pakistan, in a rapid and transparent manner thus facilitating up to 1.6 million
displaced families. It made use of plastic debit "Watan" cards that
were generated in a colossal number of 30,000 cards per day. The cards
were manufactured in China, Dubai, and Thailand and later shipped to
Dubai for personalization. Finally they were packed in envelopes along with the
PIN mailers in Pakistan.
Within
a small span of six to eight week the government of Pakistan successfully
distributed between 20,000 and 40,000 Watan cards per day with the help of
which the beneficiaries could withdraw their cash (around 20,000 Rupees or USD
232) right away.
I believe that the role of State Bank of Pakistan to
collaborate with provincial governments to make the dream
of digital G2P a reality is very significant. Moreover the
digital G2P services offer local banks a great opportunity to
grow their branchless banking business. But it is also challenging for the
local banks to strike a balance between their role as a payment
service provider and as a banker for beneficiaries. In my point of view
the digital G2P services have a wide scope in future provided the human
and financial resources operating under this program are increased manifold to
cater the huge demand for withdrawals whenever the government announces welfare
and disaster relief aid programs for its citizens.
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