Government to Person (G2P) payments have risen in importance across the world, with government agencies and NGOs opting for these services to respond to the social and economic repercussions of COVID-19. Up until September 2020, close to 208 countries had announced at least 1461 social protection measures to combat the consequences of the pandemic, as per the International Labour Organization (ILO). It goes without saying that these massive payouts need a well-structured solution that can handle a large volume of payments and process the data while keeping it secured.
Digital G2P Payment refers to a direct payment or benefit transfer in the form of mobile money sent by government agencies to citizens through an electronic system. It is essential to go digital as the beneficiaries of government welfare schemes are often low-income unbanked citizens spread across geographies. A digital solution can easily cover beneficiaries in rural or remote areas with no banking networks. The manual process of cash distribution is not efficient or reliable and cannot be practiced in the current situation when social distancing is inevitable.
Let’s find out why government agencies are ditching manual cash disbursement in favor of digital solutions.
Benefits of Digital Subsidy Distribution Platforms
When distributing subsidy or social protection to a large, segmented population, it is important to consider costs associated with it. The manual process includes handling and transporting money bills that can be an expensive affair. A Subsidy Distribution platform can take care of this digitally and highly reduce the costs associated with distributing social protections.
2. Quick Transactions
In times of crisis like the ongoing COVID-19 pandemic, government agencies need to instantly send money to those in need to help them deal with the tough times. Only digital financial platforms can pull this off and make sure that those in need receive the payment in time. Notably, the volume of transactions is no barrier in ensuring that the help reaches people in time.
3. Complete Transparency
An advanced Subsidy Disbursement platform can help agencies keep a complete record of all the payments along with the details of all the beneficiaries who have received the payments. It is far easier to track the money and maintain transparency in the system by going digital. Features like Scheme Management, Customer Account Management, and Retail Partner Management come in handy for managing the system. It also generates instant reports to give you an overview of all the payments conducted through it.
4. Extremely Secured
Security is a crucial component to consider when dealing with large amounts of money, and only a digital system can ensure complete traceability regardless of the volume of transactions. The system also allows tracing the payment trail and makes it possible for the agencies to make sure that the authorized beneficiaries get the money intended for them. The Subsidy Distribution platforms safeguard the data and transaction details of people and prevent unauthorized access.
5. Prevents Leakages and Frauds
The transparency of digital systems can put an end to the corruption that may be a significant problem in some developing or under-developed regions. Leakages are a common occurrence when high-volume transactions happen in cash. Frauds are also likely when using manual processes due to a lack of documentation and the ability to trace the entire transaction. Compensation paid to ghost workers is another problem in many under-developed countries, which digital systems can tackle effectively.
6. Accelerates Financial Inclusion
Digitization of the mass social protection and subsidy distribution processes can bring the unbanked and underserved into the financial spectrum. Government policies play a vital role in driving financial inclusion, and by prioritizing the move to go digital, governments can accelerate this process to promote inclusive growth. Additionally, by sending mobile money into the accounts of the beneficiaries, governments promote further usage of mobile money, thus promoting digitalization amongst the less privileged population.
A digital platform for Subsidy Disbursement facilitates direct cash transfers, locked subsidy distribution, public distribution system, and salary disbursements, among other things. This efficient and effective system can enhance governance and introduce an agile culture for streamlining various time-consuming processes. Some of the other advantages include status tracking, payment reconciliations, and reduction of tiers in the payment flow.
The Subsidy Distribution Solution by Panamax checks all these boxes to deliver what government bodies seek. It ensures real-time access to all schemes and benefits and easily integrates with any system – legacy or advanced – for efficient and large-volume disbursements. It also helps to maintain a centralized repository for ease of governance, end-to-end lifecycle management, eligibility checks, and pre-defined rules for application submission to simplify the process as much as possible. Get in touch with us to Schedule a Free Demo for more information about how you can leverage our platform.