The case for digital disbursements: making aid more efficient, flexible, and empowering in Asia Pacific

Asia Pacific has seen millions move out of poverty over the past few decades as countries rapidly urbanise and industrialise. According to the International Monetary Fund (IMF), the region outperformed expectations and grew by five per cent in 2023 and this year, it is likely to grow 4.5 per cent. This is an incredible human success story.

Despite this progress, immense challenges remain. Many sections of the region still live in poverty and much of the region is vulnerable to natural disasters – typhoons in the Philippines, earthquakes in Indonesia, and most recently, floods in Bangladesh.

With climate change set to exacerbate these events, governments will be called to intervene with aid to alleviate the damage to local communities. As a result, there will be a need for fast, efficient humanitarian aid delivery systems in the region.

While there is no one-size-fits-all solution, Visa’s report with Devex, Reimagining Aid in the Digital Age, found that digital aid can be transformative for Asia Pacific's digitally savvy populations. Nearly three in four aid professionals surveyed (74 per cent) agreed that digital payments could be particularly useful to climate and disaster emergency responders. With last mile aid disbursal critical in the aftermath of a disaster, the speed, transparency, and security of digital payments can offer a highly effective channel for aid.

The aid landscape in Asia Pacific

Humanitarian aid in the Asia Pacific comes in many forms. In-kind aid, which refers to the provision of goods and services, such as food, medicine, and shelter, is the “traditional” form of humanitarian aid and is still the most common.

This type of aid is most effective when markets are destabilised after a disaster, or where there is poor access to essential items. Immediate shortages can be addressed effectively through in-kind aid to offer communities a safety net and more importantly, to save lives.

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However, in-kind aid has its shortcomings. Often, items delivered are not what people on the ground need. The humanitarian sector is replete with stories of technology and equipment – think lamps, torches, or mosquito nets – being delivered where local markets do not face shortages. Because of this, they end up being resold locally for less than what aid agencies paid for them, delaying essential help from reaching those who need it and disrupting local producers in the process.

An alternative to in-kind aid is cash assistance. The use of cash as humanitarian aid has risen dramatically in recent years. For example, 35 per cent of World Food Programme (WFP) assistance is now delivered in the form of cash-based transfers. Compared to in-kind aid, cash allows people to use the money for what they know they need. It gives them agency over their own lives while the injection of cash into local economies also helps to support local producers, as seen in research from GiveDirectly.

But not all cash assistance is the same. Cash can come in various forms: hard cash, like banknotes, or digital disbursements, which are funds transferred digitally to a recipient’s phone or digital wallet.

Hard cash in humanitarian aid carries the same risks — or "cost of cash" — that we see in everyday situations. It requires security during transport, and when delivering billions of dollars in aid, the logistics can be prohibitively expensive while remaining vulnerable to theft, fraud, or bribery.

This brings us to digital disbursements.

Why digital aid disbursements are so powerful

Digital aid disbursements overcome many of the barriers associated with traditional forms of aid. They enable people to buy what they need locally, instead of relying on aid agencies and imports, which are well-intentioned but can be inaccurate.

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Digital disbursements also enhance security and trust. In fact, increased trust in digital payments is a top enabler of digital humanitarian aid, with 46 per cent of respondents in Visa’s and Devex’s report highlighting its importance. Visa’s security capabilities build on this trust by ensuring that financial assistance, often large sums of money, can flow smoothly and safely from governments and aid agencies to populations on the ground.

We have invested over US$10 billion (S$1.3 billion) in technology to reduce fraud, translating into approximately US$40 billion worth of fraud prevented in 2023 alone. Visa Advanced Authorisation also combines online authorisation with offline neural network-based machine learning to evaluate fraud risk in real-time, while tokenisation replaces card numbers with unique identifiers to protect sensitive data.

Digital aid is even enabling more innovative approaches to aid delivery. Anticipatory aid, for example, is defined by the U.N. Office for the Coordination of Humanitarian Affairs as “pre-agreed action plans that can mitigate the impact of the emergency and the need for humanitarian relief”.

With digital payments, humanitarian aid can be planned and delivered before a disaster strikes, making relief efforts more responsive to affected communities. According to our research with Devex, households in Bangladesh that received mobile money transfers ahead of peak flooding through a government scheme were 36 per cent less likely to go without food for a day.

Digital disbursements in practice

When Typhoon Haiyan struck the Philippines in November 2013, some 6,000 lives were lost and 4.4 million more people were displaced. At the time, aid agencies and governments scrambled to provide relief to survivors and prevent further damage.

The scale of the typhoon meant that direct cash transfers were not only preferred but necessary to swiftly support affected communities and stimulate local markets. Oxfam, in collaboration with Visa, rolled out a simple and efficient solution to disburse aid – a prepaid card. The goal was to put money in the hands of the vulnerable in a fast and easy-to-use manner while reducing risks of misuse and fraud.

This not only provided immediate relief but also empowered recipients to make their own purchasing decisions, supporting local businesses and economies. In total, US$500,000 in aid was delivered to those in need, while cash for work activities and cash asset recovery support was provided to over 777,000 citizens or 154,000 families.

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This is just one method of disbursing digital aid, but it demonstrates the value of digital payments in delivering humanitarian aid and increasing financial access in Asia Pacific. They also show how digital tools can provide immediate relief while supporting long-term economic stability and growth in affected communities.

The future of digital aid disbursements

To be clear, digital aid disbursements are not a one-size-fits-all solution. Smartphone adoption in Asia Pacific is high and set to reach 94 per cent by 2030, but many people in the region remain underbanked and unbanked. This means that digital aid disbursements, must be delivered in the right way, be it to bank accounts or mobile wallets, depending on the characteristics of affected communities. Nevertheless, it will be an important tool in the aid arsenal for governments and aid agencies alike.

Despite these challenges, digital disbursements make a compelling case for being impactful and getting more cash to the people who need it most. They are secure, fast, and transparent, helping aid agencies eliminate the ‘cost of cash’ and ensuring that aid reaches its intended recipients efficiently. In the evolving landscape of humanitarian aid, digital disbursements stand out as a powerful tool for making aid more efficient, flexible, and empowering in the Asia Pacific region.

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Azrin Anuar Azlina is Head of Visa Government Solutions, Visa Asia-Pacific and Aisling Quirke is Global Partnerships Lead for Humanitarian and Development, Visa Government Solutions.