This brief is brought to you by the Financing Facility for Remittances (FFR) of the International Fund for Agricultural Development (IFAD)
 
 
Issue 4 - 6 July, 2020
 
Post offices channelling remittances in the midst of the COVID-19 pandemic
 
In this brief:
 
  • The COVID-19 pandemic spurs post offices to go digital in remittances
  • Where and how do Posts take the lead in digitalization of remittances during the pandemic?
  • IFAD release: How post offices leverage the impact of remittances. A set of three working papers
  • Stories from the field: Scaling up remittances and financial inclusion through rural post offices in Uganda
  • A Commemorative stamp to observe the International Day of Family Remittances 
     
 
 
Please find here Remittance in Times of Crisis previous briefs
If you would like to contribute to this brief please contact: remittances@ifad.org 
 
The COVID-19 pandemic spurs post offices to go digital in remittances
 
The COVID-19 pandemic prompted governments to reaffirm post offices as their infrastructure for delivery of essential services to the population at large, including the vulnerable, elderly and those in outlying rural areas. Among other services, this provides an important contribution in ensuring continuity in transmitting migrant remittances in many corridors around the world. Post offices remained open in locations in the first mile, where migrants work and live, providing the opportunity to send cash, as well as delivery in the last mile in the receiving countries, at the post office or at the doorstep of the migrant families. The COVID-19 crisis has shown that post offices fulfil a relevant role in sending money across borders, as well as from urban to rural areas. They are a resilient part of the access infrastructure to services, with potential to convey a message about using financial services.
The crisis has urged many Posts to leapfrog the digitalization of their offer in remittance services, which responded to the crisis with launching or scaling up digital wallets, offered as an attractive and low-cost alternative to send or receive money. Digital wallets are increasingly being offered by Posts as a new product feature. The remittance funds can come from a bank account, a payment card, and payments from other wallet holders or cash top-ups.
Using digital wallets as a way to either send or receive money allows Posts to have a larger reach to unbanked customers and to make payments faster, more accessible and cheaper than the traditional cash and bank transfers. With digital wallets, remittances become accessible, reducing the need and costs for IT investments in rural post offices and for small merchants.
The overall impact of the pandemic is expected to trigger Posts increasing their offer of digital wallets for remittances, and linking it to other financial services enhancing financial inclusion and e-commerce – making payments easy, simple, convenient and cost-efficient.
 
Where and how do Posts take the lead in digitalization of remittances during the pandemic?
Pakistan Post digitizes through strategic alliance and franchising: linking fast migrant remittances from anywhere in the world to anywhere in rural Pakistan
 
Pakistan Post concluded in June 2020 a strategic
 
partnership with Habib Bank – a leading bank in Pakistan – to expand into digital financial services, including remittances. Habib Bank will invest US$700 million in digitizing the postal network. In June 2020, it drew up an agreement with Transfast for digital, low-cost remittances, especially from the Middle East to Pakistan. Also in June 2020, Pakistan Post launched a pilot to expand its existing network of 13,000 with 125,000 digital franchise post offices. Eventually, many small merchants could become digital franchisers of Pakistan Post, enabling access anywhere to anyone.
 
Azerpost: Postpay e-wallet expands DFS in rural Azerbaijan, linking remittances with financial inclusion
 
Azerpost precipitates on its journey becoming a national
 
access infrastructure for digital and physical financial services. Guided by World Bank programs, the 1,600 post offices already deliver 30% of the inbound remittances, and handle many small payments and agency services. The e-wallet Postpay was piloted in 2019. In June 2020, Azerpost signed an agreement with IFC to expand in rural Azerbaijan, with new technologies and partnerships for remittances and banking services.
  • Read more: 1, 2, 3
 
Digi Post Bank: Tunisia’s best mobile app of the year triggering DFS
 
More than 50% of the Tunisian population banks at the post office, using the wide network of post offices in rural areas and digital solutions. The Post delivers a 
 
large part of inbound remittances. For its Digi Post Bank app, the Tunisian Post Office won the award of the best mobile app of the year. The COVID-19 pandemic triggered a steep increase of the Digi Post Bank for remittances, pensions, and bill payments.
 
Banking on Algérie Poste: going cardless, cashless, branchless

On 5 January 2020, Algérie Poste’s electronic card Edahabia had become interoperable with the country’s banking network. Over 50% of Algeria’s more than 42 
 
million population already banks at Algérie Poste through its 4,000 post offices. Digital solutions, the majority of the remittances, as well as pensions from abroad are channelled via the Post. Algérie Poste’s Edahabia e-cardholders can use the countrywide ATM and POS networks of Algérie Poste, SATIM, in addition to seven public and nine private banks. Over half of the population is under the age of 30 and digital-savvy, and likely to use the e-card. During the pandemic, Algérie Poste launched additional new functions for cashless payments, also stimulating e-commerce. Moreover, to increase usage of cashless payments, Poste offers small merchants free of charge terminals to accept the e-card payments.
  • Read more: 1, 2, 3
 
Nagad: the world’s fastest growing DFS operated by Bangladesh Post Office
 
With nearly 10,000 post offices, Bangladesh Post Office (BPO) has more outlets across the country than all banks in Bangladesh. BPO has agreements with banks 
 
and MTOs to deliver remittances, and aims to lead the country’s booming digital financial service (DFS) revolution. BPO launched Nagad, which facilitates the day-to-day financial transaction needs of an increasing part of the 50% un(der)banked population. Nagad combines the electronic money transfer system and postal cash card for transactions via cash-in, cash-out, and sending money. It also includes mobile top-up, utility bill payments, and e-commerce payment gateway, but not yet a link to postal savings. Nagad sets itself apart by ensuring meticulous customer service, operated by BPO and its technical partner. On 19 June 2020, the Asian Pacific Postal Union defined Nagad as the world’s fastest growing DFS.
  • Read more: 1, 2, 3
 
IFAD release: How post offices leverage the impact of remittances. A set of three working papers
During the months of lockdown due to the COVID-19 pandemic, post offices show up among the few locations which continue to provide a secure and trusted channel to keep remittances flowing, serving migrants in the sending countries and their families back home, particularly in rural areas. In this context, IFAD is releasing a set of three working papers aimed at enhancing the role of national postal networks in the remittance market and explore ways to maximize the impact of remittances delivered through post offices for the benefit of underserved people in rural areas.
 
The three working papers are based on the lessons learned of the African Postal Financial Services Initiative (APFSI), a unique broad-based partnership which rolled out a large technical assistance programme to the national postal operators in Benin, Ghana, Madagascar and Senegal, involving private-sector stakeholders, regulators and policymakers.
 
Stories from the field: Scaling up remittances and financial inclusion through rural post offices in Uganda
 
Kasozi and Wilfried, farmer and student respectively, both share their experiences on receiving remittances at the rural post office in Uganda. Thanks to a partnership between IFAD, PostBank Uganda and Posta Uganda, they now have direct access to the remittances sent by their relatives abroad at the post office in the rural areas near their homes, where they can open a dedicated savings account, and can use digital technologies for financial transactions.
The project supports the adaptation of PostBank’s Diaspora Account, waiving charges on incoming Swift transfers, withdrawals and monthly fees. A Refugee Transactional Account was also launched, facilitating access to flexible individualized banking accounts for refugees, with competitive interest rates, affordable international transfers and no monthly charges. Post offices were equipped with digital and mobile technologies for remittance delivery and financial service transactions, and postal staff received specialized training.
 
A Commemorative stamp to observe the International Day of Family Remittances 
Considering the unique role of postal operators in the remittance market, with their 150 years of commitment to public service, the Universal Postal Union (UPU) invited its member countries to engage in the IDFR 2020 campaign “Building resilience in times of crisis”,
through the issuance of a commemorative stamp. 
 
The stamp was made available to national postal operators in member countries in different languages.
On 16 June, UPU, representing over 190 national post offices worldwide, also released a statement in support of the Day, and a message to migrants.
 
 
Financing Facility for Remittances
International Fund for Agricultural Development (IFAD)
Via Paolo Di Dono 44, 00142 Rome (Italy)
remittances@ifad.org
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© 2020 Financing Facility for Remittances, IFAD
 
Financing Facility for Remittances International Fund for Agricultural Development (IFAD) Via Paolo di Dono 44, Rome, Italy