Digital payments have changed the way consumers shop and businesses operate. But they’re also helping to revolutionise the way charities and non-governmental organisations (NGOs) receive donations and distribute financial aid.
Here are some examples of NGOs using the benefits offered by digital payment technology to improve the way they operate:
Blockchain-based payments for disaster zones (Oxfam)
When disasters occur, it’s vital to get aid to the people that need it quickly. An approach used in recent years is Cash and Voucher Assistance (CVA), which transfers cash or vouchers directly to people affected to spend as they wish.
During 2016, it was estimated that $2.8bn in humanitarian aid was disbursed through cash and vouchers. However, the CVA model can be expensive and inefficient. It often requires volunteers to spend many hours on the associated administrative work, taking them away from other more vital tasks.
To tackle this issue, Oxfam enlisted the help of NGO-focused cash transfer platform Sempo and blockchain consultancy ConsenSys Solutions to develop a pilot for a CVA programme built on the Ethereum blockchain.
The ‘Project Unblocked Cash’ trial launched in May 2019 in the Pacific nation of Vanuatu, which is highly vulnerable to earthquakes, landslides, cyclones and even tsunamis. The service gave people in two villages the ability to receive monetary aid more quickly, while providing real-time visibility into the flow of funds.
Nineteen shop owners adopted the system and 200 recipients were given NFC cards that held the balance of their digital wallet. Participants used the NFC cards at participating shops throughout their communities.
The pilot is aimed at providing Oxfam with a global framework for deploying a more rapid, efficient and transparent CVA mechanism for future disaster relief programmes.
Refugee food payments via blockchain (World Food Programme)
Another example of a blockchain platform being used by an NGO is the Building Blocks project run by the World Food Programme (WFP), which aims to provide refugees with a different way to access and spend cash aid.
Building Blocks enables cash transfers while protecting the data of beneficiaries and controlling financial risks. With financial service providers either insufficient or unreliable in some aid contexts and refugees facing restrictions in opening bank accounts, WFP tested the use of blockchain for authenticating and registering beneficiary transactions in Sindh province, Pakistan in January 2017.
The blockchain technology enabled direct, secure and fast transactions between participants and the WFP, without the need for a financial intermediary like a bank to connect the two parties.
Building Blocks was introduced into two refugee camps in Jordan, giving more than 100,000 Syrian refugees living in the camps the ability purchase groceries simply by having their iris scanned at checkout, using the UN Refugee Agency’s existing biometric authentication technology. Cash value for each beneficiary is stored on the blockchain, with the cash paid to beneficiaries or retailers through a commercial financial service provider.
WFP plans to extend Building Blocks to support wider unrestricted cash distributions inside the refugee camps, starting with mobile money. A new partnership will also allow Syrian women who participate in the UN Women’s Cash for Work Programme to withdraw cash at a supermarket in a Jordanian refugee camp or make purchases directly.
Cashless donations for homeless (Greater Change)
Oxford-based social enterprise Greater Change aims to support the poorest people by helping them off the street and into employment and accommodation with the money they individually raise.
In August 2018, it trialled an initiative to allow people not carrying coins and change to give donations to homeless people in Oxford via online payments. Backed by Oxford University, the scheme saw participating homeless people wear QR codes linked to an online profile. These QR codes enabled money to be transferred to the person by scanning the code with a phone and making a digital payment.
Greater Change has now developed its donation platform to enable cashless giving via mobile app or contactless payment. When homeless individuals want to access their funds, they meet with a support worker to ensure the money is spent according to an agreed development plan. Examples of what the money can be spent on include skills courses, work clothes, ID and private rent deposits.
Greater Change is incubated and partnered with homelessness and employment charity Aspire Oxford but depends on crowdfunded support to develop and implement the platform. You can donate here.