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Financial firms join together to accelerate disbursement of emergency funds
November 04, 2020
A group of financial services companies have joined forces to drastically reduce the time it takes to provide financial assistance to individuals during a natural disaster or crisis.
To date, the financial services industry has not had a standing response to address the needs of those who require emergency funds from federal, state or local governments, foundations, relief organizations or charities.
Instead, firms have supported emergency payment efforts with prepaid programs that are often designed on-the-fly after a catastrophic event has occurred. It typically takes 48 days for individuals to receive emergency funds.
The new coalition, called Payment as a Lifeline (PaaL), is now driving a coordinated industry response to enable the safe delivery of funds via prepaid cards within 48 hours of a catastrophic event – instead of 48 days.
“With hurricanes, many times you lose power. When you lose power, you might not have access to an ATM. So, we need to look at how we can enable people to get cash back at the point of sale,” says Lori Breitzke, director, product line manager at FIS, one of the founding members of PaaL.“We’re also looking at how prepaid cards should be distributed differently to people impacted by a fire versus a hurricane or tornado,” she adds.
PaaL, whose founding members include FIS, Mastercard, Transcard, Qolo, Central Payments and Sutton Bank, will ensure that payment processes, training, policies, testing, deployment plans, payment apps and card stock are all in place in advance of a crisis.
The group is also planning for mission-critical education, PR and public messaging around financial assistance to individuals (FAI) payments to be precrafted, approved and ready to implement on activation.
PaaL says financial services must become an integral part of existing disaster preparation and response efforts. The group is also calling for an industry-level effort to sell FAI programs to critical funders before disaster events occur.
Breitzke says member firms are also looking to improve the way charity donations are disbursed , an issue that has come to the forefront during the current global pandemic, with donors increasingly wanting to give money to specific individuals or businesses, rather than to an umbrella organization.
“A lot of high-wealth individuals come together and want to be able to distribute money to businesses in their communities and to know specifically where that money is going,” she explains. “They don’t want to give money to [a charity] where they don’t know the individual who is receiving that money. So, it’s something that’s really changing the way donations are flowing. It’s a more personalized experience than it was before.”
Charitable FAI contributions in the United States exceeded $400 billion in 2017.
PaaL is planning to launch its first project in November and to then create a repeatable process that will be used for future crisis planning efforts.