Infrastructure and Inclusion

From Pakistan to Portland

I’m an infrastructure junkie; and I’m not talking about bridges, railroads or chip factories. I’m excited by technology information infrastructure and what it can make happen. A recent trip to Pakistan brought into dramatic focus for me some interesting parallels between a successfully implemented information infrastructure project (Pakistan!) and what we are working to make happen at the Oregon Digital Safety Net.

I returned to Pakistan at the invitation of my friends at Karandaaz, a dynamic not-for-profit organization that has been successful, often against daunting odds, in driving digital transformation in the country for many years. In 2021 the central bank of Pakistan (the State Bank) introduced the brilliant Raast instant payment system, with the help of Karandaaz and the support of the Bill & Melinda Gates Foundation.

Raast is a great example of information infrastructure: a foundational national payment system which will reach all people, all institutions, and support all use cases. I was visiting for a series of events with the State Bank to celebrate the success of Raast and to address the challenges of moving the system into its next stages of growth. The Raast payment system was modeled in part on conceptual architecture developed by a team at the Gates Foundation’s Financial Services for the Poor group: I was lucky to work with that team while a partner at Glenbrook, a global payments industry consulting firm. The Gates model became known as their Level One Project, and embodies not just technical principles but also economic and social principles for implementing a payment system to best achieve the goals of financial inclusion.

I was thrilled to see how Pakistan’s banks and mobile phone companies have worked together to implement Raast, and to see how quickly it has grown. It is already being used throughout the country to pay government wages and pensions, to distribute benefits, for person-to-person payments; and other use cases, such as person-to-merchant payments, are being rolled out. I am very proud to have played a small part in the early stages of that work.

What makes this infrastructure?

Payments systems are generally considered infrastructure, by definition, as a foundation necessary for the functioning of an economy. But until recently access to payments systems has been limited to the relatively affluent — and in poorer countries, that has been a very high bar indeed. Then, about a dozen years ago, notably in Kenya, mobile phone providers started showing that poor people could be effectively included in payments systems through their phones, with the support of financial regulators. But early programs were limited with constraints on interoperability and other issues. Pakistan’s Raast is a shining example among the new generation of fully interoperable and highly inclusive systems that demonstrate how modern technology can be used to allow infrastructure to work for everyone.

A few other notes. In Pakistan, the central bank used its regulatory authority to ensure that all major banks and telcos participated, which meant that someone making a payment could be sure that a receiver of payment would get the funds. Without this regulatory “push”, a payment system could get built but not have sufficient “nodes” plugged in to ensure take-off (apologies for the mixed metaphor!)

Raast also relies on global banking technical standards, which will enable it to achieve international interoperability (already in the works), and on an “overlay” approach to design, which will allow banks and their technical partners to build value-added applications that will rest on top of this core system.

Pakistan joins countries around the world that are implementing instant payment systems; theirs is remarkable for being both fully compatible with global banking standards and by being driven by goals for financial inclusion — a critical element for their economy and their population. (My own county, it should be noted, implemented our own central-bank provided instant payment system, the U.S. Federal Reserve Bank’s FedNow system, this month — two and a half years after Raast’s introduction. FedNow is fully compatible with global banking standards but is not particularly driven by goals of financial inclusion. Nor does our central bank have the regulatory authority to mandate participation — at introduction, only 35 financial institutions out of some 9,000 plus institutions in the United States are participating. )

Pivot to Portland

What I’ve been working on at home does not relate to payments directly. But my trip, and subsequent reflections, helped me understand that there are more parallels between the two initiatives than I had realized.

The Oregon Digital Safety Net (ORDSN) is a communications infrastructure nonprofit that a group of us are incubating, with the help of the Technology Association of Oregon. ORDSN is a concept in development that will provide long-lasting communications capabilities (mobile phone numbers, email addresses, PO box numbers and others) to marginalized populations whose lack of these effectively excludes them from participating in our modern economy.

The Problem — Continuous Communication and Digital Exclusion

ORDSN got started shortly after I retired from active payments consulting, at the beginning of the pandemic. During this time, I spoke to a number of people involved with interesting non-profit organizations in Oregon. During one meeting, I spoke with a man working on the problem of prisoner reentry, who mentioned that some programs did not provide reentering people with phones, which really surprised me. How could anyone possibly cope with modern life without the use of a mobile phone? My concern expanded to include the homeless. With further research I learned that many, if not most, people in the Oregon homeless population have access to phones they could use most of the time; but that those phones change frequently. What they don’t have is the same phone number over extended periods of time.

This struck a nerve with me, as at the time I was living in Old Town Portland — a center for homeless services in Portland, and an area particularly devastated during the extraordinary circumstances of the pandemic. Seeing the immediate impact of these forces on the people of this neighborhood furthered my own interest in seeing what we could do to use technology to help solve some of the problems.

As we researched this issue, the problem became clearer, and deeper. We call it a lack of continuous communication capability. It is most apparent with mobile phones, but it is compounded by the obvious fact that most homeless people don’t have a stable physical address. They may have a stable email address, but if they have forgotten their email password they may not be able to retrieve messages, or the password itself if their old phone number was the key to getting this.

The result? People become unreachable and therefore invisible. Institutions (employers, landlords, doctors, social benefits agencies, courts, friends, families) cannot reach them. The result of this is their effective exclusion from our modern economy.

This is a problem of the poor. People who are not poor who lose access to their mobile phone simply “roll over” their old phone number to their new device. This is because they have an ongoing commercial relationship with their mobile phone carrier. If you don’t have this kind of commercial relationship, you can’t roll over the phone number.

The Solution — Evergreen Communications and Digital Inclusion

Solving this problem didn’t seem that hard at first — after all, there are plenty of communications solutions available. The problem was making something available that would work for people with continually disrupted lives and changing devices. I worked with an old friend of mine, Siva Narendra of Tyfone (and various other firms), who has a good technology and strategy brain. We focused on the use of existing commercial technology assets, and on the use of successful solutions to similar problems — Aadhaar, the Indian biometric identity initiative, being a prime example, as well as being one of my favorite infrastructure technology models.

Aadhaar is deservedly famous and truly inspirational. Over 1.2 billion people are registered in the system; much of this was accomplished in a staggeringly short period of time (about 18 months, I think) early in the deployment of the system. The system is astonishingly “skinny” — it keeps almost no data at the core — it is designed so that other systems (banking, education, health, voting, etc.) link to the Aadhaar system. This is digital infrastructure done right: tightly disciplined in deployment, “skinny” in design and massive in scale. The lightweight design allowed the rapidity of deployment, which in turn enabled the breadth of participation. That made possible all of the many successful linked projects (the financial services project being the one with which I was most familiar) that were made viable due to the breadth of participation. This “skinny” simple elegance became an inspiration for the design of ORDSN. (As an aside, Pakistan does have a similar biometric identity system — called Nadra — which is cleverly tied to mobile phone SIM issuance, and is useful when establishing new bank accounts for Raast payment enablement.)

For ORDSN, we came up with a solution to use IP telephony to provide people with a long-lasting “second” phone number, that we call an “Evergreen” number, which will ring on whichever device they happen to be using. People can give the Evergreen number to any institution or person they want to be able to reach them over the long term.

We then, in the design, built this out into a larger suite of Evergreen communications capabilities (email, digital vault, PO box with mail scanning, banking…) which I won’t elaborate on here, but which I will explain in more detail in future posts.

Evergreen communications capabilities will be delivered to people through their relationships with service agencies — social benefits organizations (such as homeless service centers) that people deal with today. This architecture (again, inspired by things like Aadhaar) is “skinny,” low-cost, and designed to be deployed at scale and rapidly. It will also allow service providers and technology partners to layer solutions on top of it.

We think there will be multiple beneficiaries: the people using the Evergreen services; the service agencies introducing it, the institutions who are able to get in touch with the people, and the technology firms who will enable it.

Just one example: The CIO of a major health system in Oregon expressed strong support for the concept, telling me what a challenge it was to find, for follow-up care, their very poor patients, who came into the ER room for treatment, when the phone number the patient would give was often no longer valid when the hospital or clinic tried to reach them for follow-up care. Without the follow-up care, patients would eventually return to the ER, at an average cost to the hospital of six times that of the appropriate follow-up visits.

What makes this infrastructure?

I think everyone would agree that a country’s communications systems are infrastructure: the post office, the telephone systems, the email systems. (And in the United States, our government has seen that you have been able to receive first class mail, at no cost to you, since 1775!)

But just as poor people have been excluded from financial systems in many countries, poor people are now being excluded from receiving communications on what are the necessary communications systems in our country.

This is not being done with any particularly evil intent: they are simply dropping off the systems, and being forgotten. The effect is the same, however — they are being excluded. So what we are trying to do is to create — using a thin piece of technology infrastructure — a “bridge” to achieve inclusion for those who are being excluded.

I’d like to mention that as we have explored this concept, many of my friends and colleagues have reached out to me with personal stories — about their own relatives and close friends — who are suffering from mental illness, or are experiencing homelessness or other trials, and for whom the story of ORDSN resonates strongly. All of these people have endorsed the solution we are proposing and have urged us to move forward.

The Oregon Digital Safety Net isn’t a big initiative — it is not as big as a payments system in Pakistan, or a biometric identity platform in India. But not all bridges are big. It is a narrow technology platform that could be broadly deployed, at low cost, to benefit a large number of people. And it is a platform on which many other technology “layers” could be built.

We believe it could be a seed of change in offering communications inclusion to people living on the margin in Oregon.

Support Evergreen Communications and Digital Inclusion

It was inspirational to return to Pakistan and see what an installed infrastructure project looks like. It certainly has inspired me to continue our work in Oregon.

So, we are looking for help to do just that!

The Oregon Digital Safety Net is still a concept in development. We are looking for some visionary institutional donors who are committed to digital inclusion for funds to support a pilot program. We are also looking for volunteers, and for ideas from people who want to help in other ways.

Please, if you are interested in providing this support, contact me, or Sarah Koski, our Development and Partnership Coordinator, to talk about this.