In 2012, USAID announced its commitment to actively encourage the evaluation and use of electronic payments (e-payments) in development programs, including its own, as a member of The Better than Cash Alliance. USAID also has made the use of e-payments a priority in the Agency’s Implementation and Procurement Reform. In fulfillment of these commitments, USAID actively is encouraging its development partners, contractors, subcontractors, grantees, sub-grantees and private sector alliance partners to consider incorporating e-payment systems into program design and implementation where feasible. Many USAID Missions have begun to request that procurement proposals include a suitability analysis on the use of e-payments for the funded program.

1. 1
New Trends in USAID Procurements
The transition towards e-Payments
April 9, 2013

2. What we will cover today
2
1. Introductions
2. USAID’s Commitment to e-Payments
3. USAID Tanzania: Mission Perspective on e-Payments
4. Assessing viability of e-Payments
5. Practical Tips for Implementation
6. Q & A/Upcoming Events
3
19
Agenda
4
11
22
28

3. 3
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

4. 4
USAID’s Commitment to e-Payments

5. Why USAID Supports e-Payments
5
Foster cost savings and improve aid efficiency
Increase transparency and reduce leakage
and waste
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
1
2
3
4
5

6. USAID’s Commitment to e-Payments
6
Encourage the
transition to electronic
payments (including
mobile money) in
USAID programs and
operations where
appropriate
Direct funding and support to
technical assistance programs and
partnerships fostering the
development of e-payments
E-payments
incorporated into
project design,
procurement
language and
existing
measurement
systems.
Development
of a system to
track the
usage of
electronic
payments
Tools and
trainings to assist
partners in
choosing
payment
platforms

7. USAID Procurement Executive’s Bulletin
• Evaluate e-payment alternatives, Include e-payments
use in concept papers, applications & proposals, if
appropriate
• Examples of operational costs that can use e-
payments:(1) temporary staff salaries; (2) vendor
payments; (3) travel per-diems.
• Examples of program costs that can use e-
payments: (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.
USAID
PROCUREMENT
EXECUTIVE’S
BULLETIN NO.
2012-05
(7/12/2012)
7

8. 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.
8

9. 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.
9

10. 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

11. 11
USAID Tanzania: Mission Perspective on e-Payments

12. Tanzania’s Mobile Industry by the numbers
12
Source: World Bank/GSMA 2011

13. Mobile Phones vs. Bank Penetration in
Tanzania
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Source: World Bank Databank
0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
2004 2005 2006 2007 2008 2009 2010 2011
Mobile Telephone vs. Bank Penetration in Tanzania
Depositers with Commercial Banks Mobile Cellular Subscriptions
21.5million

14. Tanzania: Bank Branches vs. Mobile Money
Agents
14
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
2012
ATMs
Bank Branches
Mobile Money
Agents
17,000
Interviews*
594*
Work Bank
Source: World Bank 2010/TDY Interviews 2012
*Projected bank branch growth
* Estimation combines agents
who serve more than one MNO
1608*
Work Bank

15. Mobile Money Products Available in
Tanzania?
15

16. Areas Of Action
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Integrating language
encouraging e-payments into
future solicitations
Integrating the use of e-
payments 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.

17. 17
Areas Of Interest
Operations and
Finance
Capacity
building
activities
Agriculture and
Health
Programs
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
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
Work with program technical teams to examine key
payment streams within health or agricultural value
chains that experience pain points with cash
management

18. Current Program Integration
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Program Objectives Use of e-payments
Tanzania Staples
Value Chain-
NAFAKA
(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.
The following programs have already begun exploring ways to
integrate mobile money into their programs and operations…

19. 19
Assessing Viability of e-Payments: Costing Utility Tool

20. Process for making an informed decision
and the tools to help you get there
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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

21. Costing Utility Tool Example
21

22. 22
Practical Tips for Implementation: Chemonics

23. Establish Internal and External Needs
• Accounting systems
• Record keeping (audit trail)
• Operation procedures
Internal
• Mobile Network Operator
vs. Bank
• Selecting a provider
• Access to payment system
External

24. MNOs vs. Banks
Country context
Mobile money vs. mobile wallet
Geographic distribution
Example from
the field:
Philippines

25. Internal – Accounting system
• Ensure accounting system is ready
• Start small and with your staff

26. Internal – Audit trail

27. Internal – Operating procedure
Mobile Money vs. Checks
Mobile request
Approval
Upload
Payment
approval
Payment
Release
Payment
confirmation
Check request
Approval
Prepare check
Sign check
Release check
payment
Copy check

28. 28
Questions and Answers

29. Upcoming Events
April 11 April 25 April 23 May 2
Ask the expert
Twitter Session with
USAID Mobile
Solutions Division
(11am-noon EST);
Info:
nandini@usaid.gov
CRS Webinar on their
experiences with electronic
voucher systems in Haiti
(11am-noon); Info:
fredrik.winsnes@nethope.org
NetHope/USAID Webinar
on lessons from Tanzania
and Uganda in electronic
payments
(8am EST); info:
JChen@qedgroupllc.com
29
Replay of the Trends in USAID
Procurements for audiences in
East Africa and South East Asia
(8 am EST); info:
hamilton.mcnutt@nethope.org