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Photo: Russell Watkins, DFID | Attribution 2.0 Generic (CC BY 2.0)

Combining eye scan payments and blockchain to empower refugees

Tuesday, July 4, 2017

In May, the World Food Programme (WFP) launched a trial project in Azraq refugee camp using iris recognition devices to take payment for food. Each person receives a sum of money from WFP which they can spend in markets and shops within the camp using eye scanning payment methods. The information is then logged using blockchain, the platform behind bitcoin.

In recent years, WFP has moved towards cash-based assistance and away from the traditional methods of food or goods distribution; around 25% of all aid WFP delivers is now cash-based. By giving refugees cash rather than goods, they have more power over what they spend the money on. By attaching the cash to individuals virtually, the risk of theft or using the money for illegal goods is greatly reduced.

Using blockchain to record and track this money has several advantages. Firstly, traditional methods of transferring money between countries have relied on money exchange services such as banks, which charge an average 3.5% transaction fee. In 2016 WFP’s cash transfers amounted to $880million meaning that, based on a 3.5% transaction fee, $30.8million was spent on bank fees. Using blockchain would allow this to be reduced or even avoided completely. 

Secondly, blockchain allows the flow of money to be easily tracked by accountants and minimises the risk of fraud. Transactions are immutable so cannot be altered or deleted, and are publicly viewable, making the process highly transparent. 

Thirdly, blockchain allows refugees to build an economic identity and a credit history which would otherwise be unavailable to them. This economic footprint is fundamental for breaking out of the cycle of poverty that many refugees might find themselves in. Finally, blockchain is fast, reliable, and durable, and could help the UN to avoid duplicate records among refugees.

This project is only now possible in Azraq camp due to the recent introduction of a solar power plant, which allows for the use of electronic systems like blockchain and the iris recognition devices. That said, the project will now be scaled up to several camps across Jordan, reaching over 100,000 refugees by the end of the year.