Global Payments Solution Research Study At International Federation of Red Cross And Red Crescent Societies

A. Background

The International Federation of Red Cross and Red Crescent Societies (IFRC) coordinates and supports its 192 member National Red Cross and Red Crescent Societies. The IFRC’s key mission is to to save lives, protect livelihoods, and strengthen recovery from disasters and crises around the world. As the world’s largest humanitarian network, the IFRC and its members have an important responsibility as one of the world’s most important actors in international disaster response.

Scaling up Cash and Voucher Assistance (CVA) is a strategic priority for the IFRC. Globally, the Red Cross Red Crescent Movement delivers around CHF 850 million of cash and voucher assistance, which is approximately 20%+ of the entire humanitarian cash and voucher assistance delivered. IFRC’s approach to CVA includes increasing capacity and improving quality through cash preparedness initiatives and surge support to operations. The use of Financial Service Providers (FSP) is one of the mechanisms employed in delivering cash to affected communities and been proved to enable scale-up and timely assistance.

Turkey currently hosts the largest refugee population in the world, close to 4 million. Some 3.6 million of the refugees hosted in Turkey are Syrians who fled the war that continues to ravage their country. With financial support from the Directorate General for European Civil Protection and Humanitarian Aid Operations (DG ECHO)[1], a partnership between the IFRC, Turkish Red Crescent (TRC), and Turkish government institutions, has been able to provide humanitarian support to over 1.8 million refugees living in Turkey, under the Emergency Social Safety Net Programme (ESSN[2]), currently the largest humanitarian cash programme worldwide. The ESSN delivers monthly cash transfers to and operates as an extension of the Turkish government’s social welfare system, relying on the services of a national baking institution. ESSN recipients receive an ATM card to access their monthly assistance and the cards can be used to withdraw money from ATM machines or to make payments in shops where the cards are accepted.

B. Problem Statement

Turkey context:

In implementing the ESSN programme, one of the critical risks identified was the reliance on a single financial service provider (FSP) to deliver large amounts of cash on a monthly basis. The current FSP is also facilitating the implementation of other TRC programmes, through Kizilaykart Platform1. Any unexpected disruption in the FSP’s systems and services could impact the assistance provided to millions of vulnerable populations in Turkey. As the FSP is an independent and contracted entity, our ability to manage risks relating to the service provision and affective operations of the FSP is limited. In addition, overreliance on one supplier or service provider for any form of programme delivery represents a risk, as any issues will have a significant impact on our ability to operate.

In parallel, the ESSN programme design and operational model were set up to respond to a previous context but in the current scenario the ESSN would benefit from increased flexibility and adaptability in order to enable greater shock-responsiveness to be agile to respond to new crisis. Exploring alternative delivery options is a key aspect to assess how feasible this objective is.

Therefore, having alternative delivery mechanisms included in the programme’s contingency plans would help mitigate such risk and build up enhanced flexibility to the system. This is not intended to replace the current FSP but would service as a contingency plan.

Global context:

In other parts of the world, many National Red Cross and Red Crescent Societies find the process of contracting FSPs a challenge, which creates a bottleneck during emergency responses. It typically takes up to six months to establish an agreement with FSPs, including the formal tender process and due diligence. Ensuring both timeliness and accountability can be a challenge for internationally funded programmes, as the movement of funds from donors to National Societies, and then to end recipients involves a complex financial pipeline, cross-border regulations, and strict Know Your Customer (KYC) requirements. The last mile in delivering cash assistance to affected populations using FSPs can also be difficult when targeted beneficiaries live in hard-to-reach areas, have language barriers, do not have official IDs, are unable to meet KYC requirements, have low literacy levels and digital know-how, , or live in low connectivity environments where digital payments may not even be possible.

C. Objectives of Consultancy:

Traditionally, the IFRC has partnered with or contracted long-established finance service providers (e.g., banks, remittance, or mobile money) as delivery mechanisms for their CVA operations. In the last decade, however, the cross-border payments market has expanded and evolved exponentially in terms of companies delivering services and the diversity of financial services provided. This is hopeful in terms of the potential to address the challenges mentioned above.

The IFRC is looking for a consultant that will be able to conduct a research study on Global Payment Solutions. The consultant will be expected to:

  1. Map the risks, challenges, and issues related to financial service providers currently faced in IFRC’s CVA interventions, including the ESSN. The impact and likelihood of these risks should be included in the analysis.
  2. Explore and evaluate the available innovative payment solutions, including those provided by new financial technology (FinTech) companies, that can potentially support the vast diversity of CVA activities and operational contexts within the IFRC global network.
  3. Analyse available services and features, effectiveness, costing structure, risks associated with the different technologies, and potential of these solutions to address the challenges and issues mapped.
  4. Develop recommendations for the ESSN project, as well as the IFRC’s CVA programmes globally, on how new financial technologies could be deployed to support ESSN and CVA programme delivery.
  5. Development recommendations and considerations for a pilot project.
  6. Develop a draft of the Request for Proposal (RFP) that could be used to procure a Global Payment Solution that would be piloted in a field setting.

The research study should seek to address the following key topics and questions:

  1. Scale. What is the potential for the global solution to scale up cash assistance? What is the possibility of addressing needs in hard-to-reach areas (particularly in communities with low connectivity, low literacy, low experience with cash in general)? Scale should be measured in terms of number of people reached as well as amount of cash distributed. Ideally, solution should cater to small to medium sized operations too (e.g., IFRC assists over 100 disasters in a year)
  2. Speed. How quickly could global payment solutions be procured (what are the requirements)? How quickly could they disburse cash and what needs to be in place to do that? (e.g., map the financial pipeline and movement of funds).
  3. Ease of Use. What features make it intuitive to use the global payment solution for distributing cash, particularly at large scales? What types of payment mechanisms are possible with the global payment solutions? And does it allow for the preference of the beneficiary? Is there possibility of using both cash and voucher in the solution? What is the support and maintenance service provided? Could the vendor directly address questions/concerns of individuals or just focal points from the National Society or IFRC?
  4. Flexibility of the solution. How flexible is the solution in adapting to different contexts, situations, and preferences of communities to receive cash? How flexible is the solution in terms of integrating with other functions such as programme and financial management and not just distribution of cash? How flexible would the solution be to provide payments in addition to beneficiaries, such as payments to staff and volunteers or to suppliers?
  5. Technology and technical integration. How adaptable are the solutions to country-level or National Society’s specific functional and non-functional requirements? Are there possibilities of integrating with the beneficiary data management solution of the IFRC or National Society in using the global payment solutions? How easy and what are the general costs? What is the architecture of the solution and what are the data security elements implemented? Since it will be a customized solution, the solution should be integrated with other solutions on the ground, such as mobile money in Africa or debit card in Europe or cash out if necessary.
  6. Accountability. What mechanisms are in place to ensure good accountability in the use of global payment solutions? E.g., tracking of transactions, auditability, data security, segregation of duties, transparency, etc.
  7. Privacy and Data Protection. What are the minimum requirements of global payment solutions in terms of personal data of cash recipients? What are the minimum requirements to fulfil KYC? How varied are national level regulations or laws in terms of minimum requirements for FSP’s serving their country/area? What are the critical data protection principles that need to be ensured in dealing with global payment solutions? Note that the IFRC has privileges and immunities that might exempt us from some regulations (such as GDPR), but how do we ensure a high standard of protection when dealing with global partners? Analysis should also include potential for creating risks to people in conflict situations due to tracking against watchlists, anti-terrorism, and pressure from local governments to get beneficiary data.
  8. Localisation agenda. How could global payment solutions empower local actors in addressing their specific needs, contexts? Does this compete with locally procured services or lower motivation for National Societies to do their own procurement?
  9. Costing. What are the general costs for procuring and using such global payment solutions? What are the costs for technology enablement? How are the local level transaction costs and how do they compare with locally procured FSP’s (e.g., fees to cash out)? How to ensure global payment solution costs are sustainable? E.g., is model based on minimum volume of transactions or exclusivity or duration of contract? Are there preferential rates for non-profits?
  10. Cash preparedness and operational readiness. How would the solution be used or applied in cash preparedness and operational readiness based on different scenarios and capacity of other National Societies
  11. Risk management. What are the risks associated to the solutions and how could they be mitigated?

D. Deliverables:

The following are expected to be delivered by the consultant:

  1. Draft Inception Report – includes methodology, high-level timeline, proposed activities, key stakeholders to consult, and effort estimates to achieve the objectives of the consultancy.
  2. Final Inception Report – capturing the scope of work and methodology and updated following feedback on the draft Inception Report
  3. Brief summary document of a literature review on financial services encompassing traditional offerings as well as innovative / emerging technologies provided by new FinTech companies, highlighting the various types of solutions and key players in the market, key features, cost models, and geographical reach.
  4. Documented meeting minutes after all consultations.
  5. Final report – A report setting out analysis, findings, and recommendations, and pathways for implementation, summarizing the challenges and issues related to financial service providers in CVA, key findings and insights from the research and consultations with experts (including trends, opportunities, and risks), and key recommendations for IFRC and ESSN programme.
  6. Draft document of the RFP to procure a global payment solution that will be tested in a field setting.
  7. Slide decks and other materials as required to support the running of the review. and validation workshop with key stakeholders to enable finalising of all reports; sharing of draft versions of the report with relevant stakeholders, via the IFRC project focal point, for feedback before being finalised.
  8. Regular reports and updates – written or oral, as required and requested – to the IFRC, in particular the project focal point, and final wrap-up of the project in an accountable and appropriate manner.

E. Experience, Knowledge, and Skills Required:

§ Experience with the private sector, global financial servicescross-border payments, and migrant remittances markets.

§ Good network and relationships with the financial sector to be able to conduct in depth discussions with key market players and not just rely on desk research.

§ Deep knowledge of traditional financial services (e.g., banks, remittance, credit/debit cards, mobile money), online payments (e.g., Apple Pay, Google Pay, Paypal) as well as innovative, emerging technologies from new FinTech providers (e.g., peer-to-peer payments, cryptocurrencies, and other asset transfers via distributed ledger technologies, microcredits/microfinancing, etc.).

§ Understanding of flows of funds, points of risks, and knowledge of financial regulation frameworks (international / cross-border and national).

§ Strong analytical skills, ability to abstract and represent graphically.

§ Ability to work and coordinate with various stakeholders including programme operations, innovation, IT, finance, logistics, and other support services

§ Knowledge of Cash and Voucher Assistance in the humanitarian sector (nice to have)

§ Experience working with non-profit sector particularly humanitarian organizations. Experience with Red Cross Red Crescent Movement (nice to have).

§ Excellent writing and communication skills.

§ Fluently spoken and written English.

F. Reporting lines:

The consultant is expected to work independently with minimal supervision and be able to assume and manage the responsibility for assigned fields of expertise. The consultant will report to IFRC Senior Officer, Cash Transfer Programming Innovations and will work with key stakeholders from the IFRC, Turkish Red Crescent, as well as partners within the Red Cross Red Crescent Movement.

G. Location:

The consultant is expected to work remotely. Travel may be required to Ankara, Turkey or Geneva, Switzerland but is not currently planned.

H. Schedule for payment of fees:

Monthly or single invoice with activity reports, to be paid upon validation and acceptance of deliverables by reporting lines.

I. Timeframe:

Duration of consultancy is expected to take up to three (3) months with an estimate of 20 to 30 working days.

How to apply


Joseph Oliveros

Senior Officer, Cash Transfer Programming Innovations

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