Paying attention to detail: how to transfer cash in cash transfers

Abstract

How to transfer cash to people has received relatively little attention in evaluations of cash transfer programmes, and most programmes are still experimenting with a range of approaches. Yet, the choice of payment system affects the costs and barriers faced by those receiving cash as well as the costs and risks of successful programme implementation. This article proposes a theoretical framework for evaluating payment systems and then applies it to three different payment systems being used in cash transfer programmes in Kenya: payment to recipients’ mobile phones that can be redeemed at various phone agents; payment through ‘smartcards’ that can be redeemed at various banking agents using fingerprint technology for identification; and payment through post offices. Both qualitative and quantitative evidence is presented to assess challenges in implementing the three systems, difficulties recipients face in using them, and the effects these systems have on the impact of cash transfer programmes.