AID:Tech offers blockchain solutions to help United Nations and European Commission with refugee problems
02 Oct 2016 Brave New Coin
The 2016 European Social Innovation Competition focuses on social innovation for refugees and migrants, as the world is facing an unprecedented displacement crisis. More than 65 million people are now forcibly displaced as a result of violent conflicts and natural disasters.
Pew Research states that the number of refugees to Europe surged to a record of 1.3 million in 2015, this “nearly double the previous high water mark of roughly 700,000 that was set in 1992 after the fall of the Iron Curtain and the collapse of the Soviet Union.” While the numbers have shown a decreasing trend in 2016, the UN Refugee Agency states that around 156 000 people reached Europe by June.
Significant numbers arrive in the EU after perilous land or sea journeys and require basic humanitarian assistance, such as provision of clean water, health care, emergency shelter and legal aid. However, many of these refugees and migrants are potential entrepreneurs and innovators. With the right support, their skills could be used and they would become less marginalised.
The dramatic increase in the number of refugees and migrants traveling to Europe is the topic of this year’s European Social Innovation Competition, run by the European Commission (EC), with the support of a consortium of partners including Nesta, Shipyard, Impact Hub, Kennisland and Matter and Co.
“This unprecedented inflow of people, many of whom are vulnerable individuals seeking international protection, presents a challenge across Europe,” states the Commission. “Not only in terms of their immediate reception, but also with regard to their long-term integration into society.”
“A €150,000 Challenge Prize by the European Commission for the three best ideas to support the reception and integration of refugees and migrants in Europe.”
– European Social Innovation Competition
This years theme is “Integrated Futures,” and called for innovative products, technologies, services and models that can support the integration of refugees and migrants. There were 1095 applications from 36 countries across Europe. Three winners will be announced at the Awards Ceremony in Brussels on October 27, and each winner will receive €50,000.
Among the ten finalists recently announced by the EC is a blockchain startup called AID:Tech. The company’s entry, “Financial Democratization for Refugees and Migrants,” outlines an intelligent voucher and digital ID solution for the refugee crisis.
The system stores a digital record of a person’s ID on a smart card, along with an array of additional information such as electronic cash, social welfare entitlements and dental/health records. “The system facilitates the integration of refugees by making it quick and easy for them to prove their identity and not get caught up in the asylum process,” states AID:Tech.
By scanning the smart card at an appropriate location, a government employee can see what language the person speaks, social services they are entitled to and who their family members are. The smart card can be topped-up remotely, acting like a mobile bank account, and empowering the refugee to spend digital cash freely in participating stores.
“AID:Tech’s platform is based on blockchain technology so all resources are distributed in a highly traceable manner.”
The United Nations High Commissioner for Refugees (UNHCR) has employed Cash-Based Intervention (CBI) to meet the needs of refugees and other persons of concern since the 1980s. “CBIs have multiplied hundred-fold over the last 10 years – not least due to the increasingly urban nature of displacement emergencies,” states UNHCR.
Cash-based interventions (CBIs) use local markets and services to meet the needs of persons affected by crisis. The most common method of delivery is a paper voucher. These coupons are redeemable with pre-selected vendors, or at ‘fairs’ organized by the agency. They either have cash value, such as $15, or can be exchanged for commodities or services. However, vouchers can be counterfeited and vendors can collude for price or quality, the agency states.
To reduce fraud, the UNHCR has been issuing e-vouchers instead of paper vouchers. However, this form of voucher requires electricity, network coverage and/or special systems that “can be costly,” the agency explains. In contrast, AID:Tech’s solution works offline and in environments with interrupted power supplies, according to their website.
Founded in 2016, AID:Tech has offices in London and Dublin. Despite it’s age, the company has achieved far more than being a finalist at this years Social Innovation Competition. AID:Tech provides blockchain-based technology and planning solutions to help governments, non-governmental organizations (NGOs), and charities with humanitarian aid funding.
The company’s intelligent voucher solution was created to act as both a personal ID card and a temporary debit card for refugees, and has the ability to be remotely managed and monitored. The technology facilitates retail-store voucher operation, with a mobile-like top-up functionality. Even when the power goes out, the vouchers can still be used by scanning a QR code.
The company was chosen as one of 11 finalists at Techstars in June, and went on to receive $100,000 in funding. At the same time, the Irish Red Cross and AID:Tech completed a pair of six-month field tests using their technology in Lebanon, where displaced Syrian war refugees were living in camps. The pilot programs provided 500 dual-purpose ID and debit cards to the refugees. They each came pre-loaded with a $20 donation that could be used in a store at the camp. “The beauty of it was that it’s all on blockchain and they could monitor that in real time and see all the transactions online,” Niall Dennehy, the COO of AID:Tech told the Irish Times.
The main problem that the technology had to overcome was counterfeiting. Paper and magnetic-stripe plastic ID cards are typically targeted by counterfeiters in the refugee camps. “Within a matter of hours, the same thing was attempted with the AID:Tech cards,” Dennehy said. “perfect copies were being presented to the shopkeeper but were useless once the QR code was scanned and showed the attempted transaction to be invalid.”
By the end of the trails all 500 cards had been fully redeemed and no counterfeiting had occurred, according to AID:Tech. It only took ten minutes to train cashiers how to use the smartphone-based app for redeeming the cards’ value, and every transaction could be monitored in real time by the Irish Red Cross.
“We see great potential for their technology and are currently exploring a number of options with them. This is a very innovative solution that will have potential both at home and overseas.”
– Danny Curran, Irish Red Cross
AID:Tech is also planning to offer blockchain-based remittance solutions where it can help in other humanitarian situations. The United Nations Development Programme (UNDP) recently started working with the company to design a proof of concept for remittance transfers over a blockchain in Serbia. The program’s goal is to find a cheaper cross-border transfer system which cuts out intermediaries such as Western Union, according to Robert Pašičko, UNDP Project Development Specialist.
UNDP works to eradicate poverty as well as reduce inequalities and exclusion in 170 countries and territories. “When it comes to UNDP’s emergency response in employment, we have a hunch that Blockchain could provide a more effective way of transferring and tracking funds,” Pašičko noted.
“Remittances are an important part of the economic impact of migration,” said John Wilmoth, Director, Population Division, United Nations Department of Economic and Social Affairs in September. “In 2015, migrants sent home $432 billion to developing countries, which is more than triple the global total of Official Development Assistance (ODA),” he added.
A June 2015 report by Rome-based United Nations International Fund for Agricultural Development (IFAD) revealed that migrant workers living in Europe “provided a lifeline to more than 150 million people around the world by sending home $109.4 billion in remittances” in 2014. The report also notes that Europe was a source of considerable remittances to fragile nations such as Iraq, Mali, Somalia, Sudan, Syria and Yemen.
“We need to make sure that this hard-earned money is sent home cheaply, but more importantly that it helps families build a better future for themselves – particularly in the poorest rural communities where it counts the most.”
– Kanayo F. Nwanze, IFAD President
Another blockchain startup trying to help refugees is the decentralized government project, Bitnation. In October 2015, the company launched its Humanitarian Aid program called Bitnation Refugee Emergency Response (BRER). This program provides two types of cards, one for blockchain-based identification and a bitcoin debit card. While the debit cards can only be loaded with bitcoins, they can be used at any Mastercard-accepting point of sale.
While both companies use blockchain technology, they’re tackling slightly different refugee problems. AID:Tech focuses on counterfeit-free vouchers and remittances while Bitnation on issuing identification and a means to personal financial freedom. Furthermore, AID:Tech collaborates with large organizations such as the UN or the Red Cross. Bitnation, on the other hand, operates independently through the company’s own ambassador network, which is a group of volunteers around the world who sign up to represent Bitnation in their area.
There is also an open community project called the Blockchain Border Bank aimed at helping refugees. Led by researcher Caitlin Stilin-Rooney and overseen by MIT Media Lab lecturer, Dazza Greenwood, the project was presented to the MIT Sloan School of Management on September 29. The project will create a prototype to ultimately give “displaced populations, refugees, undocumented persons living under the poverty line access to financial services.” The project will support MIT’s belief that “there may be a way to address banking and identity issues on the blockchain.”