Delivery of social protection measures is a big challenge to any government; especially in a developing country. Social protection program has three key components.
The first component is how we can uniquely identify the beneficiary and enrol them into the program. Digital Id revolutionised this part. The pandemic demonstrated that the countries which have established a foundation of digital id can manage the outreach much better than a country that is lacking in this area. Countries which have gone one step forward and have established a somewhat comprehensive registry of uniquely identified deserving beneficiaries did even better.
The second component is the payment system. Building on the foundation of Digital ID, in India we have introduced Unified Payment Interface (UPI) which is a completely open and interoperable protocol that has transformed the payment system. As of now, UPI handles more than 1.25 billion transactions per month which is more than four times the volume of transactions handled by the Credit / Debit card network every month. We are now in the process of building a next layer on top of it to provide a digital voucher using completely open protocol. This could be a straightforward money voucher, or it could be a voucher that is meant for a specific product if the government wants to ensure that the benefits are provided in kind with respect to certain goods and services.
The third element is the market including the supply chain, and it is still a challenge. That is why the governments are forced to run the whole physical operation of procurement, supply chain management and retail shops. Often very very inefficiently.
BECKN foundation established by Nanden Nilekani has come out with a brilliant solution to this problem. It has published and open protocol specification which can completely revolutionize the marketplace.
What is the challenge it is attempting to solve? Digital marketplace is a big boon; but the market is still heavily siloed. It is increasingly becoming walled gardens of few players. Take for example retail. There are a few large aggregators like amazon/ big basket/ Alibaba They are doing a great job; but, they are walled gardens. Same is the case with delivery or mobility or health service. It is a pain for the consumer who must look at multiple apps to make an ideal choice. This limits the choice and makes markets inefficient.
The service providers are also constrained. Unless you are a part of the aggregator platform you are at a big disadvantage in terms of discoverability.
BECKN protocol addresses this issue for both the service provider and the consumer. It is a paradigm shift; we are making internet, small business friendly and not small business internet friendly.
A simple adapter to the payment system or inventory management system based on BECKN protocol can provide any service provider equal access to the market whether he is big or small. Any frontend app which is comfortable to the consumer; could help him or her to access all the options seamlessly if it has a BECKN based connector to the network. It may be WhatsApp may be telegraph may be Google map or a special app provided by the government.
These mean simplification of service delivery [e.g. one stop payment, personalized workflows combining multiple services, granular view of events as and when they occur], freedom of choice for consumers, stitching of suppliers to fulfil a comprehensive service, much better (network driven) view of consumer demand and ability of suppliers to fulfil that demand
Such a marketplace has also the potential for bringing dramatic innovations in terms of option to the beneficiary. Once such an Open Benefit Delivery Network is in place, governments can focus on scheme design and enrolling the beneficiaries and reaching him the subsidy / financial assistance . Then leave the markets to make the best offer.
The beauty of this solution is that we are not talking about huge investment in a new platform or software solution. The service providers at a very low cost can be enabled to plug into the market. We are democratising the market just like HTTP democratised the internet. This is not a wishful thinking. We are helping the first solution built around BECKN to go live in India next month and few more are on the way.