G2P Payments are now assuming an important delivery model in building the framework for including excluded category.It discusses how it saves government's delivery channel while opening up other vistas

1. G2P Payments Spurring
Mobile Financial Services
6th Mobile Financial Service Asia Pacific
Summit 2012
Manila, Philippines
11th-12th September
Hotel Intercontinental
Santanu Sengupta
Director, Corporate Affairs and Finance
ACMFI - African Centre for Mobile Financial Inclusion
santanu@acmfi.org/acmfi2010@gmail.com

2. What are G2P payments?
Government-to-Person Social Safety Net
(G2P) Payments (SSN) Programs
Employee Payments Social Transfers Noncash Support
(wages, pensions)
To better off Conditional Food
employees Transfers
To low-income Unconditional Price Subsidies
170 million
employees Transfers
Workfare Fee Waivers
Note: Data is from
2009, CGAP

3. Financial access and
the 170 million
55% of adults worldwide—
2.5 billion people—survive without
formal financial services.
No formal
They rely instead on: access
 Family members Formal
 Friends and neighbors access
 Savings clubs
 Employers
 Moneylenders and savings collectors

4. Illustration
,00,000
millions??

5. Branchless models for scale and presence
Channel Costs
$250k Traditional
branch
$50k In-store branch
$10k ATM
$2k Agent with POS
terminal
$400 Agent with
mobile
1.7 billion people worldwide have a mobile phone but no bank account. $0k No agent
(cashless)

6. The Case for Financial Inclusion

7. Case for Electronic Payments
to

8. WHO ALL ARE IN THE FRONT

9. Process & Procedures : Govt
• An appropriate legal framework with specific
applicability to government payment
programs can further underpin their safe and
efficient operation:
• Laws and/or regulations that provide clarity
and certainty to the various parties involved,
and that promote effectiveness and
transparency in the execution of programs
should be enacted/approved.

10. Process & Procedures Cont
• Laws and regulations on payment
instruments and systems, competition and
consumer protection can also have an
important bearing on government payment
programs:
• the legal basis should support sound and fair
practices in the market place, and be flexible
enough to accommodate innovations

11. Transition to Electronic
• Identity, which is of paramount importance
• Biometrics, Multiple Authentication
• Ease of transaction
• Time saving: Operation
• Nearby : less travel time
• Interoperability
• Leads to Savings
• More transactions
• Moves on to Savings and Micro Insurance

12. ELECTRONIC Advantage

13. Payment System & Payment Structure
• Operators of government payment programs all around the
world are concerned that payments made by/to the government
are done safely, and that government money is managed
transparently and efficiently.
• An appropriate payments infrastructure should be in place: the
potential to obtain substantial benefits from migrating form the
cash based system
• Stops mis-impersonation
• Leakages
• Adds incentivisation
• Creative & Productive
• government expenditures and collections to electronic
payments relies on there being the required payments
infrastructures to process such payments safely, efficiently and
at a reasonable cost

14. Linking G2P
to the Personal Payment Eco-System

15. Changes Over Time
Towards Electronic Payments
15

16. Type of Government Payment
cont.
• Government-to-business (G2B) payments include
payments related to the procurement of goods and
services, tax refunds, and disbursement of loans or
business assistance.
• G2B payments are characterized by a large number of
transactions. The average value of G2B payments
varies widely, ranging from large-value payments
associated with large procurement contracts to small
value payments to local businesses for ordinary
operational expenses, for example urgent repair
costs.

17. Type of Government Payment
cont.
Person-to-government (P2G) and business-to
government
(B2G) payments include payments made by consumers
and businesses to government and/or public sector
organizations in the form of tax payments and
payments for obtaining services from these agencies
(licenses, permits, etc.). Similar to G2P payments, P2G
payments tend to be of a small-value nature, and are
usually characterized by a very large of number of
transactions. Likewise, B2G are a mirror of G2B
payments with regard to average size and transactional
volumes (i.e. varying size and large number of
payments).

18. The Treasury Model
• Government treasury offices/national
treasuries (hereinafter “treasuries”) are
normally responsible for managing the
processes associated with the execution of
the payments to/from the government. The
way in which the government payments are
organized and executed has been evolving
over time and varies substantially across the
world.

19. The Treasury Model
• With regard to tax collections and other government
• receipts, in some countries the associated P2G
• and B2G payments can only be made directly with the
• tax authority. In others, treasuries have adopted
programs
• by which the commercial bank network and/
• or other agents can also be used for this purpose. The
• money collected is normally centralized with the
government’s
• financial agent, typically the central bank,8
• which holds accounts for the treasury and in some
cases
• also for the relevant government agency or agencies
• responsible for tax collections.

20. Treasury Model Cont

21. 2010 Global Payment
System Survey
• At the end of the 20th century, it was a common scenario in many
countries for taxes, duties and other payments to the government to be
paid only in cash at the premises of the agency responsible for tax
collections.
• In most cases, the commercial banking network was not used on a large
scale for this purpose until the 1990s.
• To a large extent this was possible by payment system and overall
technological innovations enabling commercial banks to provide the
required services to the government at a reasonable cost and with
appropriate service levels.

22. World Bank 2010 Global
Payment Systems Survey

23. THE COST IMPLICATIONS

24. EVOLVING ECOSYSTEM

25. Ecosystem- 1- In Transition
People
Business Centre
Bank
People
People
Government
Shopping Mall
Money Trans
People
People
People

26. Emerging Ecosystem- 1
People
Business Centre
Bank
People
People
Government
Shopping Mall
Money Trans
People
People
People

27. How it is emerging
Rural Scene
URBAN SCENES
Data Centres

28. Who Plays what role
Rural Scene
URBAN SCENES
Data Centres
Citizens

29. TARGET CLIENTS / BENEFICIARIES
Business Centre
People
Govt
Business People
Centre
Money
Transactions

30. ILLUSTRIOUS MANIFESTATIONS

31. THE PATH BREAKERS
• Guaranteed 100 days work in almost all the back
ward districts in India in the Gigantic G2P
Programmes wishing to bring out huge
transformational changes across India
• Bolsa Familia in Brazil is still the front runner
amongst this segment in Impact
• Other Latam Countries following up along with
Africa
• In Asia other star performer in the making
Phlippines own 4p programme

32. 4ps Programme in Philippines

33. Conclusion
• With the financial crisis deepening in EU & prolonging in
US new reengineering of services matrix emerging in
EMERGING MARKETS
• G2P payment with enhanced, targeted, sometimes
mandated policy initiatives in different emerging markets
• Profusion of converged infrastructure like Telecom,
Biometrics, scanner, card technology, POS , mini ATMS
area bounding
• Huge capacity building and change management
programmes in the offing and can usher in the
transformational changes
• A new driver of the economy ushers in the new DAWN

34. Conclusion
• In almost all impact analysis by world bank, CGAP & other institutions it
has been recorded that the following few steps have been the most
profound pall bearer for the success of the CCT.
These are :
Replacement of Archaic law & regulations by more modern practical
enactment
- Usage of ICT platform & enabling environment & electronic payment
gateway
- Delivery mechanism of cash to direct to the beneficiaries.
- Attachment of conditionalities easily identifiable by the beneficiary
to induce her/him to use
- Multilayer propagation and capacity building programme to
popularize
the programmes for awareness development
- Strong supervisory control at various levels so that the programme
becomes a success story.
Continuous up-gradation and changes to the initiated one following

35. SALAMAT
Thank You