Subbarao, Kalanidhidel Ninno, CarloKjellgren, AnnikaQuintana, Rodrigo2014-04-072014-04-072013-08https://hdl.handle.net/10986/17618Cash transfers have proliferated in the past decade as key policy instruments to tackle vulnerability and inequality. Payment mechanisms (PMs), the backbone of cash transfers, are the channels through which cash travels from the funding source to the hands of beneficiaries. In theory, the harmonization of payment flows in PMs with other program processes is critical to delivering the right benefit to the right people at the right time while minimizing costs. In reality, however, PMs tend to remain disconnected, rendering payments inefficient and plagued by error, fraud and corruption. In recent years, program operators, financial institutions, and technology innovators have developed strategies for streamlining payment flows. These innovations, if properly integrated into program management through a Management Information System (MIS) and supported by rigorous outreach, can not only promote efficiency and transparency but also ensure effectiveness. This paper provides a framework for integrating PMs within program management. It walks the reader through seven basic steps to process payments. It does so by articulating the flow of beneficiary information and funds from the point of beneficiary enrollment to payment reconciliation and grievance redress. It also looks at the framework through the lenses of different cash transfer interventions and the cases of Kenya, Rwanda, and Mexico. The paper concludes that to execute successful PMs it is key to: (i) integrate payments within an MIS; (ii) adopt a cost-effective mix of traditional and technology instruments suitable to the country's context in the short and long run; (iii) decentralize the control and accountability of service provision across government levels; (iv) understand the capacity and incentives of stakeholders; (v) provide manuals, training and information to key players; and (vi) enforce payment parameters and penalize their violation.en-USCC BY 3.0 IGOACCESS TO BANKINGACCESS TO FINANCIAL SERVICESACCESSIBILITYACCOUNT BALANCEACCOUNT INFORMATIONACCOUNT NUMBERACCOUNTINGACCREDITATIONACCURATE INFORMATIONADMINISTRATIVE BURDENADMINISTRATIVE COSTADMINISTRATIVE COSTSAFFORDABILITYANNUAL PAYMENTATMAUTHORIZATIONAUTOMATIC TELLERAUTOMATIONBANK ACCOUNTBANK ACCOUNTSBANK BRANCHBANK BRANCHESBANK TRANSACTIONSBANKING CUSTOMERSBANKING INFORMATIONBENEFICIARIESBENEFICIARYBIOMETRICSBRIBEBRIBESBRIBINGCAPITAL INVESTMENTCARD READERSCARDHOLDERCARDHOLDERSCASH PAYMENTCASH PAYMENTSCASH TRANSACTIONCASH TRANSFERCASH TRANSFERSCASH WITHDRAWALCELL PHONECELL PHONESCENTRAL BANKCLAIMCOLLECT PAYMENTSCOMMERCIAL BANKCOMMERCIAL BANKSCOMMUNITY DEVELOPMENTCORRUPTIONCOST SAVINGSCOST-BENEFITCOUPONSCREDIT COOPERATIVECREDIT COOPERATIVESDEBIT CARDDEBIT CARDSDEPOSITSDIRECT DEPOSITDISBURSEMENTDISBURSEMENTSELECTRONIC PAYMENTELECTRONIC PAYMENTSELIGIBILITY CRITERIAENROLLMENTEQUIPMENTEXPENDITUREEXPENDITURESEXPENSE MANAGEMENTFAMILIESFINANCIAL ACCOUNTFINANCIAL ACCOUNT INFORMATIONFINANCIAL ACCOUNTSFINANCIAL ARRANGEMENTSFINANCIAL INFRASTRUCTUREFINANCIAL INSTITUTIONSFINANCIAL INSTRUMENTSFINANCIAL REGULATIONFINANCIAL REGULATIONSFINANCIAL SERVICESFINANCIAL TRANSACTIONSFINGERPRINTFLOW OF FUNDSFLOW OF INFORMATIONFRAUDFUNDING SOURCEGENDERGEOGRAPHIC BARRIERSGOVERNMENT GRANTGOVERNMENT PAYMENTGOVERNMENT PAYMENTSGROUP ACCOUNTHARDWAREHOLDINGHOUSEHOLDSIDID CARDID NUMBERIDENTIFICATIONIDENTIFICATION CARDIDENTIFICATION CARDSIDENTIFICATION VERIFICATIONIDENTITY CARDIDSILLITERACYINEQUALITYINFORMATION FLOWSINFORMATION SYSTEMINFORMATION SYSTEMSINSTALLMENTSINSTITUTIONAL ARRANGEMENTSINSTITUTIONAL CAPACITYINSURANCEINTENDED RECIPIENTSINTERNAL CONTROLSINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINVESTMENT COSTSINVESTMENT FUNDSISSUANCELEGAL ENVIRONMENTLEGAL FRAMEWORKLEVERAGELEVERAGESLIQUIDITYLOCAL CAPACITYLOCAL GOVERNMENTMAGNETIC STRIPMAGNETIC STRIPEMAGNETIC STRIPESMANAGEMENT INFORMATIONMANDATEMARKET LEVELMERCHANTSMFIMICRO FINANCEMICRO FINANCE INSTITUTIONSMICROFINANCEMICROFINANCE INSTITUTIONSMOBILE BANKSMOBILE PHONEMOBILE PHONESMONEY ORDERSNATIONAL BANKSONLINE PAYMENTOPERATING COSTSOPPORTUNITY COSTOUTREACHPASSWORDPAYMENT APPLICATIONPAYMENT ARRANGEMENTSPAYMENT AUTHORIZATIONPAYMENT FLOWPAYMENT FLOWSPAYMENT INFORMATIONPAYMENT INSTRUMENTPAYMENT INSTRUMENTSPAYMENT MECHANISMPAYMENT MECHANISMSPAYMENT METHODPAYMENT METHODSPAYMENT ORDERPAYMENT ORDERSPAYMENT TRANSACTIONPENALTIESPENALTYPENSIONPENSIONSPERSONAL IDENTIFICATIONPERSONAL IDENTIFICATION NUMBERPOINT OF SALEPOLICE STATIONPOSSESSIONPOST OFFICEPOST OFFICESPRIVATE BANKPRIVATE BANKSPROFITABILITYPUBLIC FUNDSRECEIPTRECEIPT OF PAYMENTRECEIPTSRECEIVERSREGULATORY ENVIRONMENTREGULATORY FRAMEWORKREMITTANCESSAFETY NETSAFETY NETSSAVINGSSAVINGS ACCOUNTSAVINGS ACCOUNTSSERVICE PROVIDERSERVICE PROVIDERSSERVICE PROVISIONSIGNATURESMALL PAYMENTSSMART CARDSMART CARD READERSMART CARD TECHNOLOGYSMART CARDSSOCIAL DEVELOPMENTSOCIAL SECURITYSTAKEHOLDERSTAKEHOLDERSSTART-UPSTART-UP COSTSSTATE BANKSTATE BANKSSUBSCRIBER IDENTITY MODULESUBSCRIBER IDENTITY MODULESTECHNICAL INFRASTRUCTURETECHNOLOGICAL INFRASTRUCTURETELECOMMUNICATION NETWORKTELECOMMUNICATIONSTRADITIONAL PAYMENTSTRANSACTION COSTSTRANSACTION INFORMATIONTRANSACTION PROCESSINGTRANSACTIONS COSTSTRANSFER OF FUNDSTRANSPARENCYTREASURYURBAN AREASVILLAGEVULNERABLE CHILDRENVULNERABLE GROUPSWAGESWIRE TRANSFERWITHDRAWAL OF FUNDS10.1596/17618