Best Payment Methods for HSF
There are no strict guidelines on how to distribute the Household Support Fund (HSF) this time round, meaning many authorities are facing a dilemma on how best to reach those who are eligible. Whilst needs are diverse across the country, the common aim is a solution that is simple, efficient and ultimately, empowering.
Options need to be assessed to find a disbursement path that is right for your situation. Just because support payments have always been made direct-to-bank in the past, for example, doesn’t always make it appropriate for HSF.
Here are some of the key challenges to consider when deciding how to get the funds out to those in need, based on our research and conversations with our clients.
1. Accessibility and Choice
The chosen payment method must be accessible to all recipients. Some of the most vulnerable people may not have a bank account or it may be in overdraft. Vouchers are an option but a choice of retailer is preferable to cater for access and for religious or cultural needs.
2. Confidentiality and GDPR
Confidentiality of the recipient's personal and financial information is vital. With bank transfers, sensitive and personal information is being stored and so GDPR compliance is essential. Sending a voucher code or a prepaid card may be easier when all is required is a name, plus an email address or mobile number.
3. Cost
Each payment method may come with a cost, whether it be a bank charge per BACS transfer or a cost in personnel time for data input. Voucher codes, if sent from Huggg, are free of charge. The method needs to suit your needs, also being mindful of a cost-effective solution means more of the funds go to the people who need it the most.
4. Scalability A large number of recipients must be catered for efficiently. Whilst bank transfers may become an admin challenge other options include using a third party to send bank payments, reducing the burden on internal teams, or opting for voucher codes.
5. Tracking and MI
Tracking payments, for accountability and DWP MI purposes, is vital and a very pressing issue, according to client research. Bank transfers can be easily tracked through manual processes and voucher codes allow you to see who has received and redeemed vouchers. And those vouchers which haven’t been redeemed can be re-issued so there is very little waste meaning more money is saved to be redistributed.
6. Speed
Bank transfers are typically faster than distributing physical vouchers and speed is often a high ranking factor. A voucher code can be a good compromise, as it can be sent to a phone or email address quickly, without the need for bank details, and the voucher can be redeemed instantly.
7. How funds are used
For some local authorities, how the funds are used is an important part of their local welfare objectives. Direct-to-bank means the recipient can choose how to spend their money which can bring benefits along with issues. Using voucher codes makes sure payments for FSM can only be used for the purpose for which they were intended i.e. to buy food from their choice of supermarket.
8. Disputes
With bank transfers, there may be occasions where the recipient's banking information is incorrect or the transaction is processed incorrectly, leading to disputes which need to be resolved. With physical vouchers, there may be instances where the voucher is lost or stolen. However, with a voucher code, once the recipient redeems it, all they need to do is show the barcode to the retailer and buy the items they need.
The Future - Ultimate Recipient Choice
Huggg currently provides recipients with the choice of retailer they would like to use when they receive their voucher code. This works efficiently but the future with Huggg will mean local authorities won’t have to make a decision on how all payments are distributed. Bringing all paths together, recipients would be given a choice, with a simple code, allowing them to choose from direct-to-bank, voucher or prepaid card. Simple, efficient and empowering.
