Problem Statement

Contents

1. Context
2. Motivations

Context

OGP previously built RedeemSG, a Government voucher distribution system used to carry out voucher campaigns such as CDC Vouchers, NEA Vouchers, OTH Vouchers. Through working on these voucher campaigns, we have identified a number of challenges faced by both the public and private sector.

High cost of implementing voucher schemes

For every voucher scheme implemented by the Government (and also businesses), Campaign Organisers would need to work out from scratch a host of implementation details. They would need to figure out, for example, where vouchers should be spent at; how to disburse the vouchers; how to reconcile transactions with vouchers redeemed. As a result of this, it could take months or in some cases years from the time that a scheme is conceived to the time it is being implemented.

To improve the efficiency of tracking each process, several merchants/ campaign organisers have taken to commissioning their own voucher system to be able to issue vouchers and track redemptions. This custom system, based on anecdotes, could cost Campaign Organisers thousands or millions to build.

Settlement processing is slow and costly

Slow and costly settlement processing is the result of multiple parties each having to do their own reconciliation process. The voucher issuer needs to ensure that the amount paid to the merchants is equal to the amount of vouchers collected back from the merchants, the merchants need to ensure the amount received from the voucher issuer is equal to the amount of vouchers they collected from the Residents, the voucher issuer’s bank needs to ensure that the cash settlement from their bank to all the merchants’ banks are accurate, each of the merchants’ banks need to ensure the cash received from the voucher issuer’s bank are accurate. A reconciliation mismatch between any party would lead to a long and costly dispute resolution process.

High cost of contracting for each scheme

When there’s a new voucher scheme, the agency needs to reach out to each merchant to onboard them to the scheme. Even if these agencies are already using RedeemSG, and granting an existing merchant in RedeemSG system access to a new voucher scheme can already be done, the merchant still needs to sign a separate contract as the voucher conditions and issuer are different.

Motivations

1. Design a protocol where vouchers with conditions can be issued to Residents but at the same time, upon voucher payment, merchants directly receiving cash. By doing so, we eliminate the need to onboard merchants for each voucher scheme as the merchants no longer receive vouchers, thus, exposing them to the voucher issuer’s default risk.
2. Address the reconciliation issue by having a single ledger serving as the source of truth that is immutable, time and date-stamped and is transparent to all parties involved. This system should also contain an audit trail to provide instant traceability if there’s a dispute between any 2 parties.
3. A design that should be able to accommodate most of the government’s voucher campaign complex requirements.