Final Terms of References: Payment Service Provider Maternal and Child Cash Transfer Program APRIL 3, 2020 DEPARTMENT OF SOCIAL WELFARE Ministry of Social Welfare, Relief and Resettlement Terms of References: Payment Service Provider—Myanmar 1. Introduction Page 2 2. Objectives Page 2 3. Scope of Work Page 3 a. Service b. Coverage c. Information d. Customer Care 4. Fees, Disbursement and Other Charges Page 6 a. Fees b. Disbursement c. Impost, Costs and Charges 5. Verification and Auditing Page 7 6. Representations and Warranties Page 8 a. Litigation b. Compliances c. Reporting d. Contact 7. Termination Page 9 8. Indemnity Page 9 Appendix A: Area Information, Map, List of Townships and Estimated Number of Beneficiaries (Shan State) Page 11 Appendix B: Area Information, Map, List of Townships and Estimated Number of Beneficiaries (Ayeyarwady Region) Page 13 Appendix C: Proxy Eligibility Criteria Page 15 Appendix D: Anti-Corruption Guidelines Page 16 Appendix E: Consideration Factors for Service Provider Selection Version 1 Page 17 Version 2 Page 18 1 1. INTRODUCTION The Government of Myanmar (GoM) and the World Bank are preparing a new Project to reduce childhood stunting in a selected poor Region (R)s and State (S)s. The Project has two objectives: first, to increase the utilization of nutrition services and second, to improve key nutrition behaviors. Towards meeting these objectives, the Project will implement a nutrition-sensitive cash transfer program targeting pregnant women and mothers with infants below 2 years of age, in Ayeyarwady region and Shan states. The Project will expand and further strengthen the Maternal and Child Cash Transfer (MCCT) program, currently implemented by GoM in Chin, Rakhine, Kayah and Kayin. It project will provide support for the setup of the cash transfer program in the selected R/S and in addition, invest in needed system strengthening. Under the MCCT program, pregnant mothers and mothers with young children are paid 15,000 kyats per month. Payments are made every three months until children reach age two. In most cases, beneficiaries are unbanked and financially underserved. In the selected R/S the plan is to largely use electronic cash transfers. Physical cash transfers are prone to inefficiencies, and the project will use this method only in those few areas where electronic transfers are not practical today. The payment of cash grants to beneficiaries will be implemented by selected partner(s) (the “Payment Service Provider(s)”) with the required financial and administrative capacities selected by the Department of Social Welfare (DSW), Ministry of Social Welfare, Relief and Resettlement (MOSWRR). A number of countries around the world have set up electronic cash transfer programs over the past decades. Moving away from transfers in physical cash has been a challenge but outcomes are improving rapidly - see example of review of programs in Latin America1. Electronic payment systems when developed effectively, can be extended to pay benefits for other programs (i.e. social pension, school stipends, etc.) that are currently implemented nation-wide in Myanmar. Specifically, the social pension is implemented directly under the same Ministry, and piloting of electronic payment are undergoing. 2. OBJECTIVES The MCCT program in Shan and Ayeyarwady will rely on periodic delivery of cash to pregnant mothers/mothers with young children, through selected payment provider(s), to registered beneficiaries, linked to the MCCT’s management information system. The MCCT program has been progressively rolled out in Chin, Rakhine, Kayah and Kayin under a physical cash delivery method to beneficiaries. Given the fast-growing experience in Myanmar with digital payment or cash transfer modalities, MCCT is planning to onboard an electronic payment system in wider areas, primarily Shan State and Ayeyarwady Region. The objective of the Project is to ensure the transparency, speed, accuracy, efficacy, and broader applicability of the payment system beyond this program. For this, the payment system needs to be modern, reliable, cost-effective, and secure. 1 http://ella.practicalaction.org/wp-content/uploads/files/111111_ECO_ConCasTra_GUIDE.pdf 2 3. SCOPE OF WORK The following main areas of work are the responsibility of the Service Provider: a. Service The Service Provider is accountable for opening the beneficiaries’ account and utilization of the account, which includes but not limited to: • Providing infrastructure including the use of banking partner and agents to open transaction accounts for eligible beneficiaries in the Ayeyarwady Region and Shan State • Facilitating the cash out process for beneficiaries • Providing information or location map of cash sources such as ATM, bank branches and agents Success of the payment service will be measured by: • Opening of accounts for beneficiaries • Successful credit of funds to eligible accounts with correct amount (accuracy) and within stipulated time (timeliness), • Notifying the beneficiaries that the credit is done, and • Enabling the cash out for the beneficiaries • Resolving beneficiary disputes within specified time b. Coverage A map, list of townships and beneficiary population are set out in the attached appendices A and B for the respective regions. Coverage is defined as two folds: 1) Area coverage The Payment Service Provider must be able to cover the overall population and area as enumerated in the appendices, and not limited to government-controlled areas only. Difficulty level of areas is defined based on physical reach of the area, and are categorized as: • Easy to reach areas such as cities and large urban settlements • Medium difficulty areas such as small towns • Hard to reach areas such as remote villages Travel time using a car Travel distance Easy Within 2 hours Within 5 km Medium Within 5 hours Within 15 km Difficult Over 5 hours Over 15 km Remoter category is to be assigned when the categorizations differ by time and distance (i.e. the category will be “medium” if travel time is 3 hours and travel distance is 1.5 km) 3 The Service proposal must include a separate and comprehensive plan for payment procedure in self- administered zones/divisions. These zones/divisions would be progressively added according to the reach of agreement between the government and administrators of that division (notification will be shared every quarter on potential new areas to be added to the area of coverage). To be able to provide effective coverage in overall areas, the Payment Service Provider may outsource or team up with other service providers with different legal entities, business plans or ownership. DSW contracted Payment Service Provider, will be solely responsible for all its sub-contractor’s actions and omissions and accountable for the delivery of payments services. 2) Mode of Payment The proposal must present a comprehensive disbursement plan to following groups: • Beneficiaries with cell phones; and • Beneficiaries with no cell phones for all the areas stated in “area coverage” above. Program is planning to provide smart phone readable unique bar/QR code for each beneficiary. The proposal must indicate the plan and options for beneficiaries to obtain a digital account. A digital account can be interpreted to include: • a bank account, a mobile money account or a wallet account that allows cash to be electronically credited into it from a bank account, and • cash to be withdrawn from it by the beneficiary via a branch, ATM, agent or other mechanism allowed by the banking regulator under prevailing regulations. Under some circumstances where the beneficiaries without having access to digital platform, cash delivery is required to cover overall beneficiary population. Proposals must indicate current barriers and conditions needed to transition from physical cash to electronic modes in areas, where in the assessment of the provider, electronic means are presently not feasible. At the outset, there may be a lack of alternatives to physical cash delivery, in part due to the relatively remote locations at which beneficiaries reside. These locations generally poorly served by mobile payment agents. The program, however, requires the service providers to totally eliminate physical cash delivery processes within 12-18 months of the contract date. In the interim, up to 10% in Ayeyarwady and 20% in Shan State of the program payments may be made through physical cash delivery. As the program matures, DSW expects the service provider’s network to grow to meet these parameters to avoid cash payment. c. Customer Care The Payment Service Provider is responsible for central management and reporting of the individual digital accounts for beneficiaries. Demonstrations for, and training of, beneficiaries will be required at the account opening stage. These activities can be undertaken along with program awareness training conducted by DSW/GAD. Ideally a short, step-by-step video demonstration in both simple local language and sign language (for beneficiaries with hearing challenges) that can be understood by the target beneficiaries would serve the purpose of continuous training at reasonable cost. It will be necessary that this demonstration is available to smartphone, streaming and other video platforms to reach the greatest number of beneficiaries. 4 During the term of service, the Payment Service Provider is responsible for customer care immediately upon receiving various complaints including but not limited to: 1. Liquidity issue at the cash-out point: unavailability