Within just a few weeks this past fall, United Bank Limited (UBL) in Pakistan was able to design, procure, and distribute over one million VISA debit cards to the flood-affected citizens of Pakistan following the devastating flood. In a country that previously only had 5 million debit and credit cards combined, this was no easy feat. To kick off our series on government payments and branchless banking, Nicole Pasricha, a former member of the CGAP Technology Team now working with MEDA, sat down with Abrar Mir, EVP of branchless banking at UBL, to find out how they made it happen.
Nicole Pasricha (NP): Maybe we could start from the beginning. How did the idea of using debit cards and a branchless network for aid to flood victims even come about?
Abrar Mir (AM): It happened very suddenly actually. When the question arose of how to get cash aid to the flood-affected families in a quick and transparent manner, the government called UBL and the rest of the banking industry to present our solutions. Previously, we had worked with the government to facilitate cash aid disbursements to another set of internally displaced persons—albeit at a smaller scale—and the government requested a similar technology-based solution. All of the banks were asked to make formal presentations on a plan to manage the card and cash disbursement for four affected provinces and 70 affected districts of Pakistan, reaching up to 1.6 million displaced families.
NP: That is a daunting request. How did the government decide which bank to work with?
AM: Each of the provinces had to choose their preferred banking partner based on the presentations. UBL was the only bank that was ready to deliver right away, and coupled with our previous track record on a similar project, we were selected by the provinces of Khyber Pakhtunkhawa, Punjab and Sind and also by the government of Azad Jammu and Kashmir to implement the project.
NP: OK, so you’ve been selected as the banking partner. What happened next?
AM: Once we got the green light, we began to immediately negotiate the participation of VISA and various vendors –we basically had to construct a brand new global supply chain on the fly for the plastic debit “Watan” cards we needed for the project. We had to significantly enhance our internal capacity so that we could generate 30,000 cards per day. The cards themselves had to be made in China, Thailand and Dubai, shipped to Dubai for personalization, and then sent to Pakistan where they were packed in envelopes along with the PIN mailers that were printed in Pakistan.
NP: But from there, the cards still needed to reach the final beneficiaries, right?
AM: Yes, that’s right. Once the cards were packed and ready, we arranged for shipment to the flood camps where UBL staff could distribute them personally to the beneficiaries. Our vendors literally worked through the Eid holiday to get those first cards to us in just a few days and we commissioned all modes of transportation locally and internationally to get the cards to the camps as quickly and efficiently as we could. We also quickly set up a temporary call centre to service any questions the families had about using the new cards.
NP: I know that the pace of disbursement was extremely compressed. What kind of a timeline are we talking about? And once they had the cards, how did the families actually get their cash?
AM: Yes, the timeline was very tight. During a six to eight week period UBL was distributing between 20,000 and 40,000 Watan cards per day. The beneficiaries would want to withdraw their cash (about 20,000 Rupees or USD 232) right away, which meant that our ATMs, agents, and systems also needed to be ready to handle this volume of transactions. Because the card beneficiaries were located in flood camps, they were closer to our ATM machines, and about 75% of withdrawals took place that way. But in the future, we will need more than twice the number of agents –at least 7,000 – to handle the huge demand for withdrawals when the government releases the next wave of aid.
NP: What were some of the risks involved in a massive branchless banking project in a post-disaster situation like this one? Knowing what you know now – would you attempt something on this scale again?
AM: Of course we encountered a number of challenges, some expected and others less so. The stakes were very high for us as an institution as this was a very public project in the media and government spotlight. There was a great deal of brand and reputational risk for UBL as the key implementer of the government’s biggest response to the flood situation. It was also challenging to maintain a balancing act between being a facilitator and an implementer – there were a number of important stakeholders involved and UBL had to bring everyone together. Would I repeat the experience? Definitely. This was truly a once-in-a-lifetime opportunity to contribute something to our fellow Pakistanis in a time of need. We were able to leverage UBL’s unique capabilities and network to offer access to cash when and where the displaced families needed it. Now, we’re looking ahead to the next tranches of disbursements and also what our next steps could be to encourage the card users to become full-fledged UBL customers in the future.
NP: It sounds like there is still a lot of work to be done! Thanks Abrar, we’ll look forward to the next installment.
AM: Thank you.
The full UBL story can be read in this case study by Bankable Frontier Associates.