Arcadia Blockchain for Refugees

PROBLEM: Refugees arriving in many countries in Europe are denied access to basic financial services traditionally provided by banks due to their inability to provide official proof of residence or ID. Without access to financial services, refugees are excluded from their host communities making integration into their host societies very difficult. 

SOLUTION: Arcadia’s Ethereum-based software platform allows communities who cannot provide proof of residence or identity to transact in a P2P manner. Using Arcadia, NGOs and aid organizations can institute cash-aid programs and offer access to financial services without needing to partner with local banks or having to navigate the risks of regulatory financial compliance. 

SCOPE:  Our solution renders aid organizations more efficient, more transparent, and empower beneficiaries with financial self-agency. By transacting with their host communities as equals, refugees can participate in the local economy as valued contributors to a society in which they can feel welcome and embraced.

There are 68 million forcibly displaced people worldwide. For many refugees arriving into so-called "safe" countries, the difficulties of fleeing home don't end there. Without proof of permanent residency or ID, most local banks and financial institutions are hesitant to provide services to refugee communities. This can render refugees not only financially excluded, but also, possibly, dependent on local aid in ways that are inefficient or inadequate to meet the refugee's true needs.

From the perspective of aid organizations, there's a parallel problem: research shows that direct cash aid programs are around 40% more efficient than in-kind aid. The UNHCR handed 430 million USD in direct cash-aid in the year 2016 alone. However, our research shows that efficiencies for direct cash aid hover around 80% and the cash assistance delivery methods are varied and ad-hoc, ranging from giving direct fiat money in paper envelopes delivered on foot by aid workers to pre-paid debit cards to vouchers to SMS-based payment systems. Setting up these systems takes time and requires cumbersome negotiations that are difficult and costly, particularly with regards to staffing and traceability costs.

We believe our solution addresses these two parallel problems at once. 

We partner with local NGOs and aid organizations to enable them to more efficiently offer financial services to refugee communities. Throughout our trajectory, we have formed connections and are building partnerships with dozens of NGOs serving refugees and other vulnerable communities in varied capacities, ranging in size from international, well-known organizations like the International Federation of Red Cross and Red Crescent Societies (IFCRC and Red Cross Switzerland), or Terre des Hommes, to local, mid-size cantonal organizations (Etabilissement Vaudoise d' Aide aux Migrants), to small grass-roots organizations fostering refugee entrepreneurship, education, and legal aid (SINGA, Bizgees, Asylex). 

We are constantly in contact with these organizations not only to understand their needs and the needs of their communities, but we also actively lead educational seminars, participate with them in their local programs as mentors and volunteers, and have been speakers at various UN conferences and panels offering our thoughts and recommendations on blockchain technology, sustainable development, migrant entrepreneurship, and inclusive innovation, to name a few.

We believe our mission of integrating refugees into society requires a cooperation between many stakeholders and aim to provide a tool that goes beyond a simple technological novelty into a solution that brings communities together.

Arcadia is a software platform that enables NGOs to offer peer-to-peer based financial services using the Ethereum blockchain. It features:

•Modular, customizable financial services including account creation, account balance, electronic cash (Ethereum or ERC20) wallet-to-wallet transfers, peer-to-peer exchange, micro-loans, micro-insurance.

•Configurable smart-contract execution (escrows, automatic cash disbursements)

•Real time usage data and analytics for programme monitoring.

Using our software, NGOs can issue beneficiaries a card that allows users to access the main Ethereum blockchain. We provide a simple, very intuitive user friendly interface, allowing beneficiaries to check their account balance, view transaction histories, send money, and access other services, like peer-to-peer exchanges, microloans, or micro-insurance.

Aid organizations can view aggregate usage statistics, for instance average user daily or monthly spends, can set up smart contracts for automatic cash disbursements, or set up and arbitrate escrows. They can set up spend limits, restrict usage (for instance allowing only purchases at partner shops), and closely monitor cash-aid programmes. Most importantly, organizations can implement  their programmes and  issue cards to their beneficiaries with the simple click of one button and less than 10 minutes of platform setup time.

Our solution is configurable, available anywhere with an internet connection, and is sufficiently low-tech (at the usage level), to be easy to understand for a non-technical user.

We use already-existing technology: the Ethereum blockchain. Current mainstream applications on Ethereum require high technical sophistication and are intimidating to most lay users, let alone to marginalized communities such as refugees. Our work involves packaging an already-existing technology with features and interfaces that renders using this technology easy. We provide interoperable support so that our users can still interface with Ethereum using other platforms, and thus do not depend on an NGO's maintenance of their accounts on our platform once an NGO's program or intervention ends. This renders our users truly independent, custodians of their own keys and accounts, and secure in the knowledge that there is a wide mainstream Ethereum community dedicated to maintaining the Ethereum blockchain running indefinitely. 

Aside from our platform, we have recently released a simple Point-of-Sale app for 3rd party merchants, which enables users with an Arcadia Wallet Card to pay for goods and services at partner shops. 

With Arcadia, NGOs can build financial ecosystems supporting exactly the services they want to offer with minimal setup effort and time.

Using cryptocurrencies, or the blockchain, to facilitate money transfers and execute payments is nothing new, it is in fact what they were created for! However, the technical barrier of entry to the cryptocurrency world is quite daunting, even for very tech-savy users. What we have done is made the blockchain accessible. 

Using our systems, users can send money, check balance, and view transaction history with just one or at most 2 clicks. Transactions are approved by scanning a QR code, not by typing in some long wallet address or fiddling about with a complicated hardware wallet or app.

Refugees and vulnerable communities are often located in areas where access to sophisticated hardware or connectivity is spotty or prohibitively expensive. Our apps and interface makes the blockchain accessible to these users, facilitating their integration into the local economy, in situations where banks and traditional service providers typically hesitate to get involved.

The core technology we use is the Ethereum blockchain. This is an existing technology that we leverage to deliver financial services to refugee communities and with which we package in a way that is accessible to non-technical people, ranging from NGO and aid organization staff to beneficiary vulnerable communities.

The reason we use Ethereum is for its ability to execute smart contracts and hence enable aid organizations to precisely control how aid is disbursed to their communities, including the ability to set disbursement limits, distribute to many users at once with the click of one button, allow spenditure at approved vendors (addresses) only, etc. We provide the interface that allows NGOs to set these contracts up and run them on the blockchain without having to code the contracts up themselves.

There are many already existing solutions that perform some of the tasks that our platform does, but none of them offer an end-to-end solution, from the time the user exchanges fiat for crypto, to the time the user transacts, to the time the user changes crypto back. Additionally no current solutions, to our knowledge, address the specific problem of helping NGOs integrate identify-less communities into the local economy as equals.

Financial access is tied to the concept of identity. In order to open a traditional bank account, buy a mobile phone SIM card with phone credit, apply for a credit card, or more generally to make payments and send money around, you need proof of residency and an ID. This is precisely a kind of document that refugees often do not have.

Our peer-to-peer, blockchain-based solution does not require these proofs. The NGO that issues our cards already has a registry of who is known to the aid organization as a refugee. Hence, they can vouch for the identity of the beneficiary. Additionally, peer-to-peer blockchain transactions do not per se require this proof. Hence, NGOs can issue wallets and help load them with cryptocurrencies on behalf of their communities. 

Blockchain, the backbone of peer-to-peer transactions, is the ideal solution to the lack of financial access due to missing government-issued ID or proof of stable residency.

Research shows that helping communities with cash-based aid is far more efficient and effective than in-kind aid. When refugees have access to cash and a way to transact with their money, they can then help move this money around and help distribute it among their families and meet their own needs.They have freedom to become entrepreneurial, to become self-sufficient, and to contribute to their host society as equals. In turn, host communities can benefit from the economic prosperity of refugees, enriching itself with the diversity of their varied experiences and perspectives.

We are currently running a beta test with mainstream users involving a set of around 50 wallet beta testers, and a network of 10 merchants accepting payments with our cards in both Switzerland and the SF Bay area. In the coming months we are looking to expand our tests to 200 users and up to 50 merchant shops. We are currently in discussions with several local small aid organizations in Switzerland to run a controlled pilot test in a field scenario with up to 300 refugees in camps abroad.

In one year we hope to generate a thriving, proven community of mainstream users transacting with vulnerable refugee communities as peers. This involves creating communities of users not only from among NGOs, refugees, and mainstream users but also donors and 3rd party merchants. In the first year we seek to establish a fully-integrated community of users from all the 5 market segments. This includes around 3 NGOs, 800 refugee beneficiaries, 1000 mainstream users / donors, and around 50 merchant partners. 

We expect to be growing year to year, reaching over 100k mainstream users, 200k refugee users, with 20 NGOs by year 3, and into the millions of combined refugee/donor/mainstream users by year 5.

Our main strategic goals for the first year are establishing a market presence for all of our 5 customer segments: NGOs, refugees/beneficiaries, mainstream users, donors, and 3rd party merchants. We are making very good headway with this during our current Beta tests. However more work is needed to get a pilot with an NGO in a real field scenario, either a refugee camp or a regional aid programme in Europe. 

The technology of our solution scales easily, so much as to seem trivial. What requires effort is building the partnerships and relationships among the communities and players. This requires high-touch relationship and partnership building, teaching and training people about blockchain, and generally working on building organizational trust in us as a small startup/non-profit. For this, with the aid of VC or grants, we aim to expand our small team so that we can multiply our work in this area, sending out people to local sites to observe hands-on what problems each of our customer segments are facing and trying to solve. We are also expanding our website to include training material on blockchain in general, and we have already functioned as mentors, workshop leaders, and panelists in many events designed to explain the benefits of blockchain and financial inclusion.

At the moment we are spending a lot of time and effort establishing and developing the relationships required to get aid organizations to view blockchain as a good solution to the refugee financial access problem and most importantly to trust us as a small startup / non-profit. This has required a lot of investment on our part for building educational material on the technology, participating in seminars, conferences, and panels as advocates for refugee financial inclusion, and we are slowly building a solid reputation among several UN and independent organizations big and small including UNCTAD, WTO, Red Cross/Red Crescent, HelpCode, Singa, PowerCoders, EVAM, and several others.

On the refugee side we are also reaching out to explain the benefits of our technology and generally working better to understand what are the UI or tech improvements we can make to our solution to enable our beneficiaries to use it consistently and easily.

Additionally, we are leading an important marketing push explaining our technology and our solution to mainstream users, donors, and merchants, to increase awareness of how participating in our solution ecosystem can help not just them but also marginalized communities. This has so far resulted in a rather successful launch of our Beta test, where we have managed to engage several coffee shops and restaurants not only interested in cryptocurrency as a technology, but who also align in our vision of making sure refugees are included into society as equals.

With a the influx of grants or investment, we will be able to expand our team so that we can develop the relationships we've been carefully building with NGOs, beneficiary communities, mainstream users, donors, and merchants, to scale. We will be able to spend more time and resources developing online content and tutorials for mainstream and refugee users explaining how our technology works. We will be able to add staff to the engineering team so that we can add features that are necessary for NGO programme monitoring, so that adoption can be faster. 

We have found that a big part of working with NGOs is trying to figure out their internal organizational structure, and understanding how they make decisions. At the moment it takes a long time before our solution gets forwarded to the true decision maker, because there are many levels of convincing that need to be done. Adding more staff to our team will enable us to tackle several NGO contacts at once, so that we can arrive to the decision makers faster. We will also be able to travel to more faraway places to give demos and explain how our solution works.

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2 Full-time staff

5 part-time volunteers

6 part-time mentors/advisors

1-2 part-time contractors as needed

Our team is ideal to deliver this solution because of 1) our passion for the cause, 2) our complementary skillset, and 3) our scrappy and agile team.

First and foremost, both my co-founder and I are deeply passionate about financial inclusion and providing access to refugees and marginalized communities. Elisa is a global citizen and has worked in many countries, which has shaped her perspective on the challenges of today's world. She is driven by the inequity that she sees, and actively works to solve these issues. I was raised by political refugees and have seen first-hand how a lack of access to financial institutions can impact a family and their well-being. Our passion for financial inclusion is the foundation of our company and a sentiment that is held by all members of our team.

Secondly, both Elisa and I have complementary skill-sets which allow us to work seamlessly together. Elisa has over 20+ years of product development experience, while I have held business roles in corporate strategy, FP&A, and digital revenue. We lean on each others strengths and experiences to grow Arcadia.

Lastly, we are smaller than other companies that provide cash-transfer solutions, so we are able to refine and iterate our product quicker. We can make decisions on a feature and roll it out the same day compared to companies with more hierarchy levels. Because of this, we believe that we are the best positioned to solve this challenging problem. 

We currently work together and partner with organizations in several sectors. 

Our key partnerships are local and international NGOs that help refugees or are interested in using technology to serve their beneficiaries. 

We currently work with SINGA, a refugee entrepreneurship incubator, functioning as mentors and advisors to refugee startup teams.

We work with EVAM (Etabilissement Vaudoise d' Aide aux Migrants), helping refugees learn about blockchain technology, computer literacy, and financial literacy for which we'll be running a workshop in September. We are also are figuring out ways in which we can pilot our payment and cash transfer system with their social assistance department.

We are currently in talks for a pilot with HelpCode, which uses technology to help marginalized communities,  Terre des Hommes for a pilot for wage savings solutions for working children, and Red Cross Switzerald for cash-based transfers.

For ArcadiaPay, we've partnered with a few merchants in the Bay Area, CA and Switzerland so they can accept payments from users of our Arcadia Ether Wallet using our payment app.

Our business model deals with five main populations, each of which plays an essential role in forming a more inclusive financial ecosystem. We categorize them in two groups – primary (NGOs and refugees) and secondary (merchant, donors, and mainstream users). 

Since we are first and foremost a B2B software company, our primary revenue stream comes from the suite of tools that we provide NGOs. Our software platform allows NGOs to administer cash transfer programs safely and transparently through blockchain technology. Our solution is not only estimated to be significantly cheaper than other cash transfer methods, but also allows NGOs to customize their program’s features (s.a smart contracts, p2p exchanges, and micro-loans). We charge a one time start up fee which covers planning and implementation of the program, as well as a monthly subscription for our software. 

Our secondary revenue stream deals with merchants, donors, and mainstream users. We provide merchants with ArcadiaPay (our POS system) and charge a nominal fee per transaction. This not only saves merchants more money, but also brings in socially conscious, tech-forward customers. Donors and mainstream users will also have the ability to make donations and participate in the P2P marketplace through our Arcadia payment cards and online platform. 

We are currently in the process of raising seed capital which will go towards establishing our company and fueling both our primary and secondary revenue stream. We believe that both revenue streams will help get us on the path to financial sustainability. Arcadia’s advantage is our ability to derive value from many stakeholders (such as NGOs and merchant partners). With NGOs, we will charge a monthly subscription for our software platform, as well as a one-time customization and startup fee. With merchants, we will charge a transaction fee that is nominal in comparison to other POS providers.

We applied to Solve for several reasons:

1.Global Visibility. We are currently rather small and operating mostly in Switzerland but the problem of financial inclusion for refugees and other marginalized communities is a global problem. The more people that are aware of existing solutions to this problem, the more people we can help. With the backing of the solid reputation of MIT Solve, we are hoping we can bring awareness of the problem and our solution to a wider audience.

2. Network and Mentorship: As mentioned before, we have found it is very difficult to make inroads with large aid organizations because the internal organizational structure and decision-making process is not entirely transparent to outsiders from the private sector let alone small startups like us. With the backing of the MIT Solve network, we are hoping we can find a good pilot and implementation scenario where our solution can be demonstrated and measured. We could also use some advice in terms of navigating the often confusing local laws and regulations governing fintech, privacy, and refugee law.

3. Partnerships / Grants & Investment: Arcadia would benefit from investments and/or grants that would enable us to expand our dedicated team of very enthusiastic and driven contributors. We have been bootstrapped so far, and have come along a very long way given how we started, but investment would enable us to truly reach more people on a global scale.

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We would love to partner with UNHCR and similar large organizations on a pilot program. We already have developed some contacts with several of these organizations (including the UNHCR, UNICEF, WFP, IOM, RedCross/RedCrescent, MSF,), though we have not yet managed to implement a joint program yet. 

Other partnerships with state-level organizations that help refugees come into Europe or other "safe-harbor" countries would also prove beneficial. Again, we have made some inroads here (for instance with EVAM-Etabilissement Vaudoise d' Aide aux Migrants), but we could use more help here as well. 

Partnerships with businesses in the service industry (ex: cafes, grocery stores, barber shops) will also help accelerate the adoption of our technology and the options offered to refugees. If large grocery chains like Safeway or Lucky's use our payment system, more businesses will likely sign on, growing our p2p ecosystem tremendously. 

Good contacts or mentorships in the field of legal aid would help us tremendously as well: at the moment we are not always very clear what are the legal ramifications of supporting international crypto transfers with our software, especially in light of several conflicting regulations passed by several different countries. Anyone who could help or mentor us in the field of compliance, regtech, fintech, crypto law or money transfer, VASP, or banking licenses would be very valuable.

Our solution is peer-to-peer based, facilitating financial transactions among equals using the blockchain. The key to our solution is that everyone gets to transact on equal footing, with all transactions publically available on the blockchain. We use the main, public Ethereum network (as opposed to a private permissioned blockchain) precisely for this reason. With our solution, not only are transactions among peers clearly visible, but also all transactions from the NGO that facilitates the availability of our platform is visible too, thus enhancing the trust in organizations that aid marginalized communities.

The grant money from this prize would enable us to establish a moderately-sized pilot serving around 1000 beneficiaries. It would enable us to send staff on-site to educate beneficiary communities of our solution, including education on financial literacy and blockchain, and host communities on the benefits of financial inclusion of refugees. It would also enable us to hire a part-time engineer to help us finish up the NGO admin back panel, that would enable NGO operators and admins to see real-time analytics on financial peer-to-peer transactions occurring in the community. This would enable NGOs to identify pockets of users, isolated users, estimate average daily transaction volumes, and basically render their aid more specific and efficient.

Studies worldwide show that when women are given the means to become financially independent, the outcomes for whole families improve. Women head of families tend to manage their money in ways that see increased spending on education and children, hence paving the way for a more prosperous society moving forward. Our solution, which empowers marginalized communities to become financially included into the mainstream society, does not discriminate on the basis of gender or age. Hence, using our solution, aid organizations can issue wallet cards to women independently of men. A woman won't need a husband to help open a bank account, or obtain a loan, or get paid for their labor. They can make their own transactions on their own wallets and spend their money where and how they best see fit.

With the Innovation for Women Prize, we will use the money to implement our solution in communities of vulnerable women. Refugee women and children are a particularly vulnerable group, so we will use this money to implement our solution in at least 3 communities serving women and children, and monitor its effectiveness and impact, with a focus on how it benefits women and children in particular. Specifically, we intend to measure especially along the axis of safety and security, to see if access to financial services enables women and children to access safer, more secure ways of living.

Our solution was born from the challenge of including refugees into society. It is our belief that by enabling refugees to contribute economically into their host societies, both host societies and refugees benefit immensely. We originally started our work in Switzerland and the proximity of the Andan foundation would enable us to collaborate closely with them.

With the 50k Refugee Inclusion Prize, we intend to expand our staff to hire an engineer to help support the completion of the Arcadia platform. We will use the money to support travel and implementation of our solution in either 3 small pilots or a moderately-sized (larger) on-site pilot. We would also greatly benefit from the Andan Foundation's network and past work with refugee aid organizations and would welcome the opportunity to collaborate with them (prize or not!) to find locations where we could implement the Arcadia Platform and monitor how our solution is helping refugees around the world.

We would like to be considered for this prize because we are thinking of implementing Arcadia in Mexico, starting with the state of Chiapas, which is one of the first ports of entry for Latin American refugees on their way to the USA. 

With the 25k, we hope to be able to navigate the local fintech/cryptocurrency laws of Mexico and partner with local aid organizations to run a pilot program, possibly in Tapachula, or Tuxtla Gutierrez, for 3-6 months, and report on impact, to see if expanding nationally to Mexico would make sense in the future.