“Cash has been an exceptional vector of progress in humanitarian action, empowering people, protecting dignity, mitigating the negative secondary effects of in-kind assistance, improving accountability to affected populations, increasing participation in humanitarian and development responses, supporting local economies and, last but not least, boosting operational efficiency, which in turn saves some humanitarian cash. But what happens when cash goes digital, bringing with it the risks of exclusion, discrimination, or surveillance? In this post, ICRC Policy Advisor Pierrick Devidal opens an honest conversation as to whether and how humanitarians should continue using digital cash.
‘Cash’ is no longer a dirty word in the humanitarian sector. Over the last two decades, it has evolved – from a synonym for operational agility, to a relatively niche innovative humanitarian approach, and now to a global standard of good humanitarian assistance practice. People love it, humanitarians love it, and donors love it. It is reasonable to say that its weaknesses are largely compensated by the benefits it brings. Cash is a humanitarian no brainer.
And maybe that’s the problem.
Because cash is no longer cash. It is dematerialized and digitalized. It is all forms of digital payments including prepaid cards, electronic vouchers, and cryptocurrencies – and it has your name on it. Unlike real physical cash, digital payments are linked to identities and personal information. As a result, they can identify, they can exclude, and they can discriminate. Yet, falling in line with the global digital transformation, humanitarian programmes using cash transfers have turned, en masse, to digital solutions.
There are logical reasons to consider digital cash a good solution – if cash has been shown to enhance autonomy and resilience, and the world is going digital, why should people affected by conflict be denied access to something most of us use on a daily basis?
In parallel, the dark side of digital solutions is emerging and the over-enthusiastic and relatively naïve fascination bias for digital technologies is passé. The infodemic, massive cyber-attacks, data protection scandals and ‘surveillance capitalism’ are shining a light on the paradox of progress and the dark side of digital technologies, calling for a more sober approach. It seems that the humanitarian sector is also starting to realize that, maybe, digital solutions are not always a no brainer.
And maybe that is a good thing.
As recent articles have highlighted, there may be a case against digital cash. While the cashless cash trend is accelerating under the influence of economic actors, donors and the COVID-19 pandemic, critics are pointing to the increasing risks of ‘data colonialism’, ‘surveillance humanitarianism’, ‘techno-solutionism’, ‘data injustice’ or ‘digital exclusion’. What cash can do, digital cash can do in reverse. The critics raise uncomfortable but important questions for the humanitarian sector.
In short, it seems that humanitarians are finally taking a deep breath and a step back from the race to adjust to the ‘Fourth Industrial Revolution’ and realizing that in contexts where violence and persecutions are widespread, we need to talk about digital solutions and cashless cash.
Cashless cash vs. principled humanitarian action
There are many entry points and angles to this conversation. Some of them more obvious than others. There are technical dimensions that are related to operational considerations, risk management or data protection questions. There are strategic dimensions that are related to questions of positioning, competition and relevance. And there are political and ethical dimensions. It is a multilayered humanitarian puzzle.
Digital payments may create significant interference with the fundamental humanitarian principles of humanity, neutrality, impartiality and independence, commonly referred to as NIIHA. It is however not clear yet whether, and how much, these tensions are manageable.
Digital technologies, including digital payment mechanisms, are not neutral. They are aligned with the political objectives of those who create and promote them, including tech companies, banks and governments. In countries affected by armed conflict or other situations of violence, these actors are – to put it mildly – not always neutral. Being associated with them or their objectives can raise perception issues and put the neutrality of the humanitarian actors who use them into question (and ultimately, jeopardize their security).
Because digital payments are often carried out in partnership with financial service providers that have significant control over the parameters of digital payments, including flows of personal and sometimes sensitive data, the operational independence of the humanitarian organizations who use them can become compromised.
Those same financial service providers operate under different legal frameworks and have a different mandate (i.e. profit), so partnering with them may create tensions with the ability of humanitarian organizations to operate and deliver with impartiality – based on needs only – and not on needs and, for instance, States’ security considerations.
Finally, by replacing the human element by a digital interface, some are concerned that we are sacrificing some crucial components of humanity.
Cashless cash and ‘do no harm’
The ‘do no harm’ principle is sacrosanct in the humanitarian sector – or rather, humanitarian actors always try to do as little harm as possible, by mitigating the negative impact that their interventions and activities may bring for the affected populations they serve, and to the environments in which they operate. But with digital payments becoming the standard, there is a feeling that humanitarian organizations really have no choice but to adopt them.
That pressure trickles down. Even when we may be able to identify some of the risks attached to digital payments, and without necessarily having the solutions yet to mitigate those risks effectively, we offer digital payment solutions to affected populations, and we don’t always offer them an alternative, particularly given that some say we live in a post-consent world. Do recipients really have a choice? Are we not transferring risks and this lack of choice to them; or, if we collectively decide to stop using digital payments, are we taking away power and making a paternalizing choice for affected populations?
These are not easy questions, and there are even bigger ones. Is it realistic or ethical to pause digital payments in humanitarian programmes? Can we really afford the human and financial cost of forgoing proven lifesaving assistance or of reverting to in-kind, which can be less effective? Do we need more regulation, or a plan B?
These are existential questions, because they relate to trust in humanitarian action. And the new oil is not data; it is trust. We invite our fellow humanitarians, States, the private sector and, most importantly, affected people, to join us in the conversation.
An updated version of the Household Economic Security (HES) guidelines has recently been launched by British Red Cross. To download this document, the analytical overview and the HES glossary click on the links below:
- Household Economic Security (HES) guidelines – step by step guidance
- HES Analytical Overview – providing a list of driving analytical questions for a HES assessment
- Key HES Terminology – providing an updated glossary to help unpack the 3 components of HES and related concepts
The guidelines and all its supporting documents, including tools for data collection, a HES report template and example reports in multiple languages can also be found on the IFRC Livelihoods Centre Website.
The HES guidelines are based on the Household Economy Analysis methodology and can be now be applied to both rapid and slow onset emergencies, and also used to gather baseline information for livelihoods and resilience building interventions.
Breaking down Household Economic Security into 3 components (food security, basic needs and sustainable livelihoods) can help colleagues of the International Red Cross and Red Crescent Movement navigate the humanitarian and development landscape as part of their operational reality and mandate. The guidelines may also be useful for other actors involved in food security, economic security and basic needs and livelihoods assessments.
The Cash Hub and IFRC have created a short tip sheet of abstracts and summarises from the IFRC (2020) Step-by-Step Guide for Rental Assistance to People Affected by Crisis and it intended to introduce the reader to some of the key concepts related to Rental Assistance Programming. To download the tip sheet please click here.
Rental assistance is an important programming option that has relevance to support people in crisis to access safe and appropriate shelter in a range of contexts. Many Red Cross Red Crescent National Societies and other humanitarian agencies are increasingly interested in this programming option. In 2020 IFRC developed the Step-by-Step Guide for Rental Assistance to People Affected by Crisis which can be accessed here.
A rental assistance programme often involves the provision of rental payments, but rental assistance goes beyond the provision of cash and voucher assistance. The objective of rental assistance is to ensure people’s protection and dignity, whilst enabling access to adequate accommodation for an agreed period of time, to make it possible for people to live in a dignified space without fearing eviction or abuse. An exit strategy must be planned from the outset, ensuring people can maintain their living conditions once support ends.
- Written by: Sayanti Sengupta
- Organisation: Red Cross Red Crescent Climate Centre
- Role: Consultant, Social Protection
The 192 National Societies of the Red Cross Red Crescent Movement have been providing first-line emergency response services during the ongoing Covid-19 pandemic, many of which have included support to national governments in expanding their social protection schemes. The unprecedented health and economic impacts resulting from this pandemic have accelerated linkages between National Societies and governments, with stronger collaborations to adapt and expand coverage of cash and social protection interventions.
The ability of National Societies to be part of response actions during the Covid-19 emergency highlights their role in delivering assistance during future climate emergencies. As climate risks and vulnerabilities rise these contribute to increased loss of livelihoods, impoverishment, food insecurity and inflated migration flows. With trends indicating that climate extremes are intensifying, it is crucial to consider climate risks as threats that will require well-designed, nationally managed, sustainable instruments for dealing with emergencies. Linking humanitarian action with social protection efforts might provide an opportunity to reach those more at risk from climate change and increase the effectiveness of humanitarian response with long-lasting impacts. Delivering cash to vulnerable households in a timely manner can help prevent negative coping strategies and boost the resilience of people affected by crisis.
Some of these links were essentially captured in the session on ‘Strengthening Linkages with Social Protection: RCRC experiences and way forward’ which brought together National Societies using social protection to reduce vulnerabilities arising from climate risks. The session, hosted by the Technical Working Group on Cash and Social Protection in September 2020, as part of the Climate: Red Virtual Summit organized by the International Red Cross Red Crescent Movement, included an engaging panel discussion on how the Malawi Red Cross Society, Kenya Red Cross Society, the Pakistan Red Crescent Society and the Philippines Red Cross have been contributing to building up the responsiveness of national social protection systems for climate preparedness.
Experiences of National Societies in linking Humanitarian efforts with Social Protection for Covid-19 and beyond
During Covid-19, the Philippine Red Cross (PRC) has made use of pre-existing beneficiary lists of the national social protection scheme- the Pantawid Pamilyang Pilipino Program (4Ps), which is primarily used for poverty eradication but also has a shock responsive component to cover beneficiaries in the aftermath of typhoons. The lists, derived from the local governments, were used to target people who are generally excluded from the programme but require assistance due to hardships caused by the pandemic. For this reason, PRC extended coverage to those households which are not traditionally covered by the social protection system but were at risk during the emergency.
The Kenya Red Cross Society (KRCS) assists the national government in scaling up the Hunger Safety Net Program (HSNP), by supporting early action that uses automatic triggers for droughts. In general, KRCS supports in addressing climate vulnerability to droughts by horizontally expanding cash assistance to distribute cash to people who are not covered by the HSNP, and by increasing top-up amounts to people who receive cash assistance from HSNP. During Covid-19, KRCS has helped the government by sharing data and registering new beneficiaries to receive cash transfers.
The Malawi Red Cross Society (MRCS) has facilitated the use of social protection for floods and droughts in Malawi by providing support in identification, registration, and verification of beneficiaries for the National Social Support Programme. Especially for women who are particularly vulnerable to climate shocks, MRCS has implemented a crisis modifier using forecasts for horizontal and vertical expansions of cash transfers, in order to mitigate negative impacts.
The session thus captured the experiences of how some National Societies are working with social protection and primarily cash assistance. The need for National societies to respond to climate related disasters and coordinate with national social protection systems will only increase in the foreseeable future, and important learnings from these experiences were highlighted.
Key insights on using Social Protection for Climate Emergencies by National Societies included
- Success of effective humanitarian response of National Societies (NSs) to climate related shocks will depend on the strength and maturity of pre-existing social protection systems.
- Cash preparedness of NSs, which is often determined by availability of funds, established transfer channels, accessible distribution points and engaged community actors, is important to complement government schemes and extend support rapidly during climate emergencies.
- While social protection can go beyond cash and voucher assistance, cash transfers remain a tried and tested mechanism that is often favoured by governments and can be delivered rapidly and on scale.
- NSs can strengthen existing social protection (SP) systems by supporting the review of SP policy, the harmonisation of beneficiary registration, delivery of benefits, monitoring and evaluation, among others.
- Along with social assistance, NSs could consider complementarities with other parts of social protection (including labour-related interventions, job training, social service and care)
As one of the panellists in the discussion mentioned, “climate change is exacerbating risks that affect the most vulnerable, and in future it might become the main driver of such risks. Linking social protection and humanitarian action will be crucial to address such risks“.
Through initiatives such as the Technical Working Group on Cash and Social Protection and others, the International Red Cross Red Crescent Movement is increasing its preparedness and capacity to support such linkages around the world, helping to address climate risks and strengthening national SP programs.