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America Wasted $160 Million Trying To Get Afghanistan To Use E-Payments (vice.com) 150

An anonymous reader shares a report: The country might be home to America's longest-running war, but the US has spent more time, energy, and money trying to rebuild Afghanistan than it has spent killing the Taliban. American taxpayers send billions to Kabul every year and every year billions disappear into the pockets of Afghan government officials. Electronic payment systems would go a long way to solving that problem. The US Agency for International Development (USAID) wanted to do just that. The Agency figured if it could convince those at corruption hotspots, such as customs agents and border guards, to use e-payment methods, then it might curb the amount of cash those agents pocketed every day. Between 2009 and 2017, USAID spent $160 million and partnered American tech companies to set up e-pay in Afghanistan, according to a new report from the Special Inspector General for Afghanistan Reconstruction (SIGAR). The goal was to get the border guards trained and using the new methods, with an aim of 75 percent of all customs transactions paid electronically by 2017. As of today, less than one percent of those transactions are electronic, SIGAR reports. And custom officials loathe the system. "It's a very long and inefficient process and that's why people do not use this method," one Afghan custom official told SIGAR agents.
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America Wasted $160 Million Trying To Get Afghanistan To Use E-Payments

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  • peanuts. hold out for more.
  • by Harold Halloway ( 1047486 ) on Thursday August 24, 2017 @11:24AM (#55075461)

    "We tried convincing corrupt customs officials to change to a new payment method which would prevent them from stealing large sums of money but they weren't interested. We are at a loss to explain why that might be."

    • Re: (Score:2, Offtopic)

      by fermion ( 181285 )
      It is also that the US military runs on bribes and money laundering. There is never enough money, they always need more money, because there is aways some US officers, some US administrator, some US contractor that is taking 10% off the top. With electronic payments that are 100% auditable this revenue stream disappears. I assume that these e-payment contractors chose to take a bribe to fail rather than a bullet.
    • "We tried convincing corrupt customs officials to change to a new payment method which would prevent them from stealing large sums of money but they weren't interested. We are at a loss to explain why that might be."

      this 1000x..... Plus importers who are used to paying bribes to expedite contraband aren't interested in using the new system either. Plus government officials that get their cut... etc...

      You can't just tell people that they "should start using the new system". You have to tell them that they "have to use the new system". The only way this type of thing works is if you force it on the users and customers and fire/fine those that are actively bypassing it.

      The problem here is that the US is a third pa

    • Also "We tried to introduce a high-tech electronic payment system to a medieval Islamic society and they found it too hard to use. We have no idea why, the US technology companies who sold us on it said they found it easy".
  • The system is BAU/As Designed. This is how we Americans do socialism. No dirty single payer health care, UBI or (saint's preserve us) "the dole" for us. We use our Military to keep our economy going. Otherwise wealth inequality gets to the point where it all shuts down like it did in the 30s with the robber barons and whatnot. Go google "Eisenhower" and "Military Industrial Complex" if you want to know more.
  • Wait, what? (Score:2, Insightful)

    by Anonymous Coward

    "Hey guys, we think you're corrupt and stealing money, so we want you to adopt this new system that will make it harder to be corrupt and steal money."

    And we're surprised the plan failed?

    • "Hey guys, we think you're corrupt and stealing money, so we want you to adopt this new system that will make it harder to be corrupt and steal money."

      And we're surprised the plan failed?

      Exactly. Nobody should be surprised at all. Maybe next year we can spend a few hundred million on a campaign to have criminals imprison themselves instead of the inefficient process of having them be apprehended, prosecuted, transported to prison etc...

      Who exactly got the $160 million bucks? That would be a story actually worth reading.

  • by jpschaaf ( 313847 ) on Thursday August 24, 2017 @11:33AM (#55075505)

    No doubt the same contracting firms that built healthcare.gov created the payment system.

  • by JohnFen ( 1641097 ) on Thursday August 24, 2017 @11:34AM (#55075517)

    The numbers have likely changed, but in 2012 about 50% of all financial transactions were done with cash in the US. For transactions involving amounts of $25 or less, the figure rises to 75% in cash.

    Getting a 75% adoption rate in Afghanistan seems over-the-top optimistic from the start.

    • Not really. You're talking about the infrastructure for an entire country, here they are talking about specifically targeted transactions. It is very much possible to do that. Heck my work is sitting at 100% right now, far higher than the rest of the country. They simply don't accept cash at the canteen.

      Also part of the USA's failure is that the system is stuck in the stone age of electronic transactions. Unsafe credit card practices (signature) combined without outdated payment methods (no simple wireless)

      • Also part of the USA's failure is that the system is stuck in the stone age

        This is part of why I think it's unrealistic -- we're talking about electronic payments from US entities. Even US citizens don't trust the system enough to wholeheartedly embrace it. Why would Afghani citizens?

      • On saturday here there are markets selling bootlegged shit on the side of the street. Even they accept electronic payment including paying with my phone. You won't see that in the USA very frequently.

        I have seen them in the US before, but it's been a while. I used to even see panhandlers who took cards. I assume that they stopped because there weren't enough people stupid enough to allow them to swipe their card.

    • by Kjella ( 173770 )

      The numbers have likely changed, but in 2012 about 50% of all financial transactions were done with cash in the US. For transactions involving amounts of $25 or less, the figure rises to 75% in cash. Getting a 75% adoption rate in Afghanistan seems over-the-top optimistic from the start.

      I don't know Afghanistan I doubt people pay customs on a bag of groceries they bought across the border. At the border I would think you're talking about supplies for stores, industry, markets and major/bulk purchases. Like, things they are probably quite capable of paying for electronically if they wanted to. If they wanted to get anywhere they should probably just have imposed a max limit that says customs transactions over say $1000 must be paid electronically, like you simply don't get valid documents o

    • For 2% cash back I use my card for pretty much everything. At least until some places started adding the transaction fee to the card purchase, good incentive to go back to cash.

    • How many people in the US pay import taxes and customs fees in cash?

  • You think? (Score:5, Interesting)

    by PhantomHarlock ( 189617 ) on Thursday August 24, 2017 @11:36AM (#55075527)

    The Agency figured if it could convince those at corruption hotspots, such as customs agents and border guards, to use e-payment methods, then it might curb the amount of cash those agents pocketed every day.

    Why would they act against their own self interest given their situation? In very poor countries where everyone including government officials and police are paid very little, graft is a way of life. It takes a lot more than trying to force an e-payment system to change this type of behavior. There is a reason judges in the United States are paid very well. To make them more immune to bribery. If any given official who's job it is to handle lots of money is not paid well himself, he will tend to skim off the top.

    It takes a deep-rooted cultural shift to move away from graft, and the solution is much more complex than simply trying to implement an e-payment system. Also, if, as the quoted official says, it is very arcane and difficult to use (and that is not just an excuse to keep pocking to the loot) that presents even less of an incentive.

    A multi-pronged approach has to involve their own government's willingness to truly change the behavior of their officials from the top down, in addition to whatever magic etchnology solution the west is proffering. It is a very difficult thing to do when the culture is deeply embedded in an organization at all levels.

    • You miss the point.

      How much do you think US contractors were paid to implement that e-payment system? Probably even more than the Afghans steal.

  • 1) Corrupt officials don't like using traceable payment methods? I'm SHOCKED!

    2) We have to admit the possibility that the payment methods really do suck. 10 years ago the states had card swiping at the register, right? Quick, easy, efficient. Faster than cash OR checks, it was really the ideal solution ( except for the security ).

    Then we "upgraded", and now it's faster to use cash and, often, checks. Chip transactions take forever, and that's only compounded by modern machines which run SLOWER than the

    • Faster than cash OR checks

      In the US, it used to be faster than cash, but that stopped being true a while ago when payment systems started adding all those stupid questions to the checkout process.

      And chip cards are even worse. They seem to take about 1.5 to 2 times longer than swipe cards.

      • NFC is faster than swiping, get with the times America.

  • by HBI ( 604924 ) on Thursday August 24, 2017 @11:39AM (#55075555) Journal

    People I trust have flown into certain countries with literal pallets full of cash and were handing it out in bank wrap to local warlords as the price for their forbearance. Like, soldiers - not CIA agents or USAID people.

    Regardless if you used a payment card or not, the very act of giving these people money IS corrupt, by any Western standard. But it's how business is transacted there. If you don't pay them, body bags come home unnecessarily. So your definition of 'wasted' money may not be adequate to cover the situation.

    • And this is why Afghanistan might be better off if we'd left the Taliban in charge. As cruel as they are, the Taliban effectively enforce the rule of law and prevent anyone but themselves from being corrupt. That's a basis to eventually build a functional developing society from. If you try to skip that step and build a developing democracy on the sands of corruption, it'll never gain any traction.

      • Yes, not invading Afghanistan would have been smarter than doing what we did.

        Pulling out now would be smarter than what we are going to do.

        In 2001, nuking the country until the mountains melted and the sands glowed for 100 years would have been the correct response to an attack on a few thousand civilians emanating from there. The reason why asymmetric warfare has been so popular for the last 75 years or so is that the pinprick attacks weren't mass attacks (mostly) and weren't targeted at civilians (mostly

        • The only thing stupider than what happened if your proposal. Nuking a practically-defenseless country would've:
          1) left the USA without any allies and most likely under sanctions
          2) made the USA far, far more likely to be preemptively nuked by another country in the future, endangering 300,000,000 lives in a way that a handful of pathetic criminals blowing themselves up can never do
          3) created a huge spike in terrorist funding and focused all terrorism efforts specifically onto the USA, instead of mostly on th

          • And also, by the way, most of Al Qaeda would've survived the nukes by living in Pakistan. And if the USA had nuked Pakistan, millions of Americans would've died in the response.

            • by HBI ( 604924 )

              The objective wasn't to kill them. The objective is deterrence. If another country wanted to risk devastation by hosting them, their problem. I doubt it would have taken much effort to see the troublemakers dead after that.

              Allies are not so the US can be defended - you can try to convince yourself of that, but it was never true. Allies were to prevent the European powers from Finlandizing towards the Soviets during the Cold War, which is why NATO is pointless now. The US doesn't need allies to defend i

          • by HBI ( 604924 )

            Complete disagreement.

            Preemptively nuking a practically defenseless country happened in 1945. People understood we'd use the things then. They don't now.

            Deterrence involves fear. You're being a pussy like Bush was. Pussies get beaten up in the schoolyard.

  • by Anonymous Coward
    Easy Fix. Stop sending money PERIOD. They might get the message.
  • by grasshoppa ( 657393 ) <skennedy@tp[ ]co.org ['no-' in gap]> on Thursday August 24, 2017 @11:42AM (#55075573) Homepage

    We ( the US ) "upgraded" to chip technology, and now a transaction which took 2 seconds before takes almost a minute now. The situation is exasperated by the software "upgrades" at the registers which make them run slower now than they did 10 years ago ( they were fast back then ). The situation is so bad at some stores that I've started carrying cash again because of how long a digital transaction takes.

    Maybe these Afgan folks are on to something here.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      One minute?? How did you manage to take something Europe had been using for years, with no speed problems, and make it run slow?

      • by Khyber ( 864651 )

        It's probably tied to the Bitcoin network by now.

    • We ( the US ) "upgraded" to chip technology, and now a transaction which took 2 seconds before takes almost a minute now.

      You the US fouled up the transition quite royally. Transactions still take less than 2 seconds with chip+pin in the rest of the world, and it's even faster with paywave. Hell my mobile takes less than 2 seconds to pay on a bog standard payment terminal.

      • by apoc.famine ( 621563 ) <{apoc.famine} {at} {gmail.com}> on Thursday August 24, 2017 @01:06PM (#55076283) Journal

        We fouled up the transition if you only care about speed, and not security. In most of the world, pin+chip is recorded, and then the transaction gets balanced at a later time. It's possible to clone a thousand cards once you know the pin, and then execute multiple transactions against it. Eventually some system will check and it will be declined, but depending on how long it takes to finalize the transaction, you can steal a lot of money. In the US, it checks the balance before completing each transaction. That's what takes so long.
         
        So the US is more secure, but it takes longer. I'm not sure that I'm willing to claim we fouled up the transition given that. Since the switch, I've had 0 fraud on my card. I used to get 1-2 fraud instances every year before this. Is that worth an extra 20 seconds at the check-out? I think so.

        • by Kjella ( 173770 ) on Thursday August 24, 2017 @01:42PM (#55076635) Homepage

          We fouled up the transition if you only care about speed, and not security. In most of the world, pin+chip is recorded, and then the transaction gets balanced at a later time. It's possible to clone a thousand cards once you know the pin, and then execute multiple transactions against it. Eventually some system will check and it will be declined, but depending on how long it takes to finalize the transaction, you can steal a lot of money. In the US, it checks the balance before completing each transaction. That's what takes so long.

          I don't know where "most of the world" is, but here in Norway at least 99.9% of the terminals and 100% of the ATMs are online doing balance checks and from I've entered my PIN and hit OK to it clears in maybe two seconds. It's long enough that I have to briefly pause before yanking the card out, not long enough that I bring my hand down to wait for the "approved" message. Waiters etc. have wireless terminals that work just as well as the wired ones. I can't imagine twenty seconds unless there's a modem doing dial-up on demand to relay the transaction. The back-end should most definitively answer in a second or less.

        • In the US, it checks the balance before completing each transaction. That's what takes so long.

          That isn't why the systems in the US are slower. I can hit a payment gateway in another country, which then hits a payment processor back in the US, and have the result returned to a terminal in under 200ms most of the time. The problem is with the way that they are implementing everything that occurs prior to the online request being generated. I have seen some terminals spend over 20 seconds negotiating the transaction details with the chip prior to generating the first application cryptogram. Dependi

        • We fouled up the transition if you only care about speed, and not security.

          Claiming the USA has some lead in security is laughable and bordering on absurd. Here, let me secure against all this fraud with a little squiggle. That ought to do it.

          In most of the world, pin+chip is recorded, and then the transaction gets balanced at a later time.

          Balancing at a later time happens within seconds.

          It's possible to clone a thousand cards once you know the pin

          It's possible to do a lot of nefarious things when you know someone's pin code. That's why we keep it a secret. Mind you it's possible to do a lot if you're able to make a squiggle too, something far easier in the USA.

          Since the switch, I've had 0 fraud on my card.

          You do realise that fraud rates have plummeted in the rest of the world as a

        • Transactions in New Zealand are verified before being accepted. Only takes a few seconds. I can even see the transaction immediately after in my mobile banking app.
          Once you know the pin, it's still pretty hard to clone a chip card. You'd need to get the private keys out of it first.

        • I've had 0 fraud on my card in Europe in my entire life (20 years of card usage).

          10 days after moving to the US, I had a fraud on my debit card with Pin+Chip. And yes, it is much slower than in Europe, but no I don't see the point in extra security since the solution is good enough in Europe (and actually maybe even better).

    • Almost a minute? What are you smoking.

      Also, the transaction is taking nearly the same total time, the only difference is that before you would swipe the magstripe and then more stuff would happen whereas now you can't remove the chip until the last step. So granted it's more convenient to swipe and put the card away in your wallet while the terminals finishes up, but that's nothing to do with how long it actually takes to acquire the transaction.

      By the way, did you know that you can copy a magstripe card wi

    • It must be your infrastructure. In the Minnesota metro area, I use chip+pin in many different retail locations. It only takes a few seconds. The longest part of the transaction is me entering my PIN. Well, OK. The longest part of the transaction is me entering my phone number because I forgot that stupid little fob to get my rewards. But still.

      • Central CA.

        The problem is definitely multi-vectored. While the readers certainly suck, the registers themselves add a significant amount of overhead to the process. It honestly seems that the newer the register, the longer it takes to create a transaction and process a payment.

        Hell, I'm not even talking about how long it takes the customer to figure out which end of the card to put in, when to take it out, ect...that's usually so much worse.

      • What credit card do you have that is chip+pin as mine are the stupid chip+sign ones?
        This is a serious question as I haven't heard of any card issuer in the US doing chip+pin.
    • I don't want to do it because:

      1. it's hard, because
      2.it takes too long
      3. I have to wake up earlier
      4. I'll have to miss my favorite show
      5. because it's my constitutional right and I don't care if it's wrong
      and our newest
      6. because it target's me as an individual, or/and generalizes my identity.

      The old way was insecure, outdated, and cost institutions (see users) millions of dollars a year due to avoidable fraud. This way is somewhat more secure ... period

    • 10-15 year old equipment to run the chips. Nobody wants to pay for new equipment so it's a mess. I've been to places with new terminals (Trader Joes in my neck of the woods) and it's a fraction of a second longer than swiping.
  • >> Electronic payment systems

    Don't you need "electricity" for those? Seems like "instant fail" for this location...
  • one more example of why our presence there has nothing to do w/ national security
    • Just another opium war [bbc.co.uk]... gotta keep the pipeline open

    • by Strider- ( 39683 )

      Until Afghanistan turns back into a failed state like what happened after the Soviets left, or what happened in Iraq after the US left. The only thing that abhors a vacuum more than nature is power. If the US reduces its influence in the area, then someone else will fill that void, and we probably won't like the results.

  • Amazing, could have been used for so many other things I'm sure!
  • Absolutely retarded.

    Afghanistan is less developed than most countries in sub-Saharan Africa. The whole country has around 2 (as in 2.0) miles of railway. The literacy rate is 38%. Whoever expects electronic payments to take off in Afghanistan probably thinks we can eradicate poppy cultivation in exchange for planting corn and raising sheep.
  • by Anonymous Coward

    No twist how that would somehow be Trump's fault? Or at least some unrelated stab at him? Come on, you're slipping, Vice!

  • by Anonymous Coward

    It's called nation building and regime change. Corporate military industrial welfare. Bush did it. Obama did it. Trump's doing it. (And you sure as fuck better believe Hillary would be doing it).

  • ..."follow the money".

    The idea that this makes sense in Afghanistan - where safe running water and electricity are still primary concerns - is idiotic. So idiotic, I strongly suspect corruption.

    So...follow the money. Just once, I'd love to see someone actually burrow to the bottom of this, find out WHO (SPECIFICALLY) authorized this, at the behest of whom, and how much $ was involved in 'no-bid' contracts or 'friendly' arrangements.
    AND THEN PROSECUTE THEM AGGRESSIVELY.

  • by kbg ( 241421 )

    Wouldn't it be simpler to just prosecute the corrupt officials for corruption? I mean how complex could it be? One undercover agent and then rinse repeat that for a few months until everyone is to scared to take bribery because they don't know if the traveler is an agent. Problem solved.

    • Wouldn't it have been simpler to have had a military governor since 2001 and only now gradually introducing democracy instead of having elections 3 months after the invasion? Japan didn't return to fully self governed until '72 and it seems to have worked out OK for them.

    • It probably would be, if USA had the jurisdiction to arrest and prosecute people in Afghanistan.

      Afghanistan is not the 51st state.

    • by Pembers ( 250842 )

      The cases would have to be investigated by the Afghan police and prosecuted in the Afghan courts, as no one else has jurisdiction. In countries where the customs officials are corrupt (and get away with it), it's quite likely that the police and judges are corrupt as well. So even if the police and judges could be bothered to take on a case against a corrupt customs official, they could probably be easily persuaded (i.e. bribed) to drop it.

      In other words, corruption exists (and continues to exist) because t

  • It is a global method for the Political Parties and Government to spend millions of dollars to make their political partners rich with useless tenders. Get used to it.
  • The Agency figured if it could convince those at corruption hotspots, such as customs agents and border guards, to use e-payment methods, then it might curb the amount of cash those agents pocketed every day.

    So you're saying this foolproof plan didn't work? Huh.

  • Is someone using copy-and-paste hit pieces from Breitbart to create Slashdot summaries now?

  • Unlike the billions spent on consistently failed causes without even the good premise this one had #drugwar #factoryeducation #TtrillionUnaccountedPentagonSpending
  • "the US has spent more time, energy, and money trying to rebuild Afghanistan than it has spent killing the Taliban" Rebuilding? Really? 1) Attack an oil-rich country disguising your invasion as "War on Terror". 2) Destroy nearly all of their infrastructure and industry. 3) Give American companies some lucrative contracts to provide services for the US Army and to rebuild the previously destroyed infrastructure, and take over the oil fields. 4) Leave Afghan industry still in ruins. 5) Profit. Ah, America. A
  • Wake up everyone. Can you imagine the amount of benefit that our own country would have experienced over the last 15 years if we hadn't dumped $1T of our budget into that godforsaken wasteland?
  • I hope the people of Slashdot will help me test the translation program I have written. It allows on-the-fly repair of English statements badly-translated from the main Afghani languages and renders them into a more accurate English translation.

    I entered the customs official's comment, "It's a very long and inefficient process and that's why people do not use this method," into my software, and this is what I got back:

    "When they can't afford proper health care or to send their kids to college, how can I ex

  • In Europe there is IBAN, while allows you to transfer cash from any account to an account electronically. Over here it isn't so simple. Last time I wanted to pay my landlord it was still by check - what is this? 1880?

  • American taxpayers send billions to Kabul every year and every year billions disappear into the pockets of Afghan government officials.

    That money should be going into the pockets of home-grown God's honest American government officials!

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