Friday, December 4, 2020

PosoCard to cut costs, improve efficiency

BotswanaPost recently launched the PosoCard, a biometric smart card that will be used to payout social service grants to beneficiaries. The PosoCard, a debit card based payment system, will be facilitated through Bank Gaborone for payment of welfare benefits and social security. It will replace the coupon system in payment of old age pension, pension for war veterans, destitute allowances and other public assistance payments.

In 2009, the Department of Social Protection outsourced the payment of social benefits to BotswanaPost. It was a tedious process that also had serious security implications for officers who were entrusted with keeping the cash safe. The social security funds became key targets for robbers and transporting large amounts of cash and proved to be a logistical nightmare. BotswanaPost was faced with the onerous task of transporting cash for payment to over 140 000 beneficiaries in over 800 locations nationwide. The post office later introduced the coupon system, but problems still persisted as there were incessant complaints of long queues and long waiting periods.

Botswana Post Chief Executive Officer Pele Moleta said at the launch that the PosoCard is yet another testimony to the post office’s commitment to improving service delivery. He said the PosoCard will have an embedded chip that will store all the details of the beneficiaries, including ID numbers, date of birth, residential address, pictures and all ten finger prints. For identification, beneficiaries will be requested to place one finger on a finger print scanner.
“The new security features will ensure that the card cannot be used by any person other than the approved beneficiary,” said Moleta.

Beneficiaries will be able to make cash withdrawals at any post office nationwide and receive a receipt bearing the withdrawal amount and available balance. The card can also be used to purchase foods at selected merchants and pay for services like water and electricity. Moleta said through the PosoCard, BotswanaPost wants to avail banking services to Botswana’s unbanked population and instill a spirit of saving among Batswana.

“The card is actually a bank account, and beneficiaries do not have to withdraw all their money, but can leave some in their cards for future use. Beneficiaries will be able to access their grants through various payment gateways, including the post office and retail points of sale. Effectively those who were previously unbanked are now part of Botswana’s banking community,” he said.

In the past those who sought payment for arrears had to fill in a form and wait for up to three months for such arrears to be paid. With the PosoCard, arrears of up to three months will be paid into the beneficiaries’ accounts without any need for application. Withdrawals and balance enquiries are free. Moleta said the Poso Card is quite durable, but encouraged users to keep it in a safe place. The initial card will be given out for free, but beneficiaries will be expected to pay a replacement fee of P22 for a lost or damaged card.

BotswanaPost is currently on a registration exercise to ensure that all beneficiaries convert to the Poso Card. The exercise will go on until the beginning of June. Beneficiaries can register using their national identity card from anywhere in the country. Those who are bedridden or unable to physically go and collect their allowances can appoint a proxy, who will however have limited mandate. Bank Gaborone has been appointed as the settlement bank in the disbursement of all social benefits.

The Poso Card is not a new phenomenon and has been successfully introduced in countries like South Africa. The United Nations World Food Program has also used it widely. In Botswana, it is widely expected that the PosoCard will reduce instances of fraud and enhance security in the payment of social security grants. Incidents of fraud have been endemic in disbursement of welfare grants in Botswana. Cases of small-time criminals collecting benefits for dead relatives are commonplace; while in some instances employees have been accused of defrauding government of millions after paying out welfare benefits to ghost beneficiaries. Through the PosoCard, BotswanaPost has made a drastic change from cumbersome, costly and inefficient cash payments to electronic payments, instantly saving government a lot of money by reducing cost and improving ease of disbursing welfare benefits. The card will also reduce long queues that have previously caused friction between beneficiaries and the post office.

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