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Graham P Cornish
The IFLA UAP Office has recently introduced a new payment method which has been developed to help libraries pay the fees which are sometimes charged by supplying libraries for international interlibrary transactions. The payment system is called the IFLA Voucher Scheme, and aims to remove all the small financial transactions from international ILL which make it so costly and time-consuming. The Scheme uses plastic payment vouchers instead of real money. These are circulated among libraries as a kind of surrogate currency, and net-suppliers are reimbursed for their services by exchanging the vouchers for a cash refund. The system is explained in detail, together with a look at payment problems, and future plans for the development of the Voucher Scheme.
The IFLA UAP Office has been researching a new payment method which has been developed to help libraries pay the fees which are sometimes charged by supplying libraries for international interlibrary transactions. The payment method which has been developed is called the IFLA Voucher Scheme, and is already becoming widely known. The development of the project began over two years ago, and the pa yment Scheme has been in use on a trial basis since January 1995, but in order to explain how the idea came about, it is necessary to look at the need for a new method of payment.
There are of course many libraries which still offer free ILL services, and one of their arguments against introducing a charge is that it actually costs so much to make that charge. With bank charges and administrative costs, it is actually often cheaper not to charge a fee. It is generally accepted, though, that a more efficient service can be offered if a charge is made, since money i s then available to maintain and improve levels of service. Libraries which do continue to offer a free international ILL service often do not have the resources to match the high level of demand, and may find that their service deteriorates to a level where they have to begin to charge anyway. By making a charge, the service can often improve through having income to support it.
Having decided to make a charge for international transactions, what is the best mechanism? There are many payment methods in use, but many of them have both advantages and disadvantages.
Prepaid request forms are used mainly by the major document suppliers. Service providers receive the payment well before supplying the service, but users must use the service regularly enough to make it worth buying a supply of forms.
Deposit accounts are often available with major suppliers for users who make their requests electronically.
International Reply Coupons cost far more to purchase than their redemption value, and have limited usefulness, being redeemable only at Post Offices for postal services or cash. However, in cases where libraries are not allowed to retain any money received for services to other libraries, IRCs are an effective payment method. Whereas cash payments would have to be passed up to he highe r authority, IRCs can be retained and exchanged for postal services at the local post office.
Unesco coupons are not popular with supplying libraries since the mechanism for redeeming them can be cumbersome, and their use as a currency for ILL appears to be on the decline.
Reciprocal agreements, where costs are waived, based on the fact that borrowing levels between two libraries are roughly equal, are an effective means of paying for services, but by their very nature do not have wider applications.
Invoices are probably the most popular way of charging another library for individual ILL transactions, where prepaid request forms or deposit accounts are not an option. However, it has already been demonstrated that invoices are costly for both requesting and supplying library in terms of staff, administrative time and in bank charges.
What many of these payment methods have in common is some form of financial transaction, which makes them expensive, time-consuming and out of reach of some groups of library. The IFLA Voucher Scheme aims to remove at least some of those financial elements.
A two-year pilot project was launched in January 1995, but the research and development of the Scheme began nearly two years ago, and the initial idea for the Scheme was introduced by Graham Cornish, UAP Programme Officer, several years before that . His proposal for some sort of international payment system based on a library bank was initially met with much doubt, with certain librarians calli ng the proposal “a sledgehammer to crack a walnut”. However, the idea gradually gathered support, and we were able to begin the research in November 1993, following the acceptance of the proposal by the Conference of Directors of National Libraries, and we were given generous financial support from the British Library which funded a part time research post for one year.
In that first year it was possible to consider all aspects of the Scheme such as the physical format of the voucher, the cost of the voucher and how the Scheme would actually work. For example, would it be possible to provide reduced price vouchers to libraries in less developed countries, while still offering the major document suppliers a system in which they would be happy to participate.. Ot her aspects which had to be considered were: how long the vouchers would be valid; if in fact the Scheme was legal. Since it represented a kind of surrogate currency, designed partly to avoid paying large bank charges and exchange tariffs, it was important to be certain that we were not planning to contravene any international currency laws. Consultation with the UK’s Solicitor General confirme d, to our relief, that the Scheme is completely legal.
The draft Scheme
which we eventually designed, and which is now being tested in a two year pilot project, works like this. Vouchers are sold by the IFLA Office for UAP at a cost of 8 US$ per voucher. A half-voucher also exists, for 4 US$, and libraries may purchase as many vouchers as they require.
Once a library has purchased a supply of vouchers, the vouchers are used as currency to pay charges which are levied by libraries for ILL transactions. We have recommended as a guideline that one voucher (worth $8) pays for one transaction - that is, one loan, or a photocopy of up to 15 pages - but that can only be a guideline, and libraries are of course still able to set their own charges, as with any other payment method. The cost of the voucher is probably the most difficult aspect of the Scheme because the charges set by different libraries vary so widely. For the major document suppliers, a payment of $8 is much less than their normal charge for international transactions, while many smaller libraries might charge the equivalent of $2 or $3, or even less. The existence of the h alf-voucher means that payments of any size may be made in multiples of 4 dollars. Vouchers may be sent as prepayment attached to the request form, or paid in response to a cash invoice.
Once the vouchers have been received by the supplying library, that library can keep the vouchers to be re-used at a later date when it in turn wishes to request an item from another library. The vouchers can be circulated in this way any number of times, and do not have an expiry date. For a library which does a roughly equal amount of requesting and supplying, that is all they have to do.
Libraries which are net requesters, that is they request more items than they supply, will inevitably need to buy more vouchers as they use up their stocks. Libraries which supply more items than they request will in time accumulate an excess of vouchers which they have received as payment. These vouchers can be forwarded to the UAP Office for a refund equal in value to the purchase price of th e vouchers.
In a two year pilot project, the vouchers have been on sale to any library which wishes to participate. So far, about 80 libraries have purchased a supply of vouchers, and have begun to use them to pay for their interlibrary transactions. Of course every new project meets some difficulties, and the Voucher Scheme is no exception.
Some major libraries still prefer to use the International Reply Coupons have the great advantage of being available for purchase in one’s own local currency. It must be said that the fact that the IFLA Vouchers must be bought in US dollars does prevent some libraries from participating in the Scheme. Of course we would like to allow payment in other currencies, but this is expensive and the Scheme has no money to cover administration costs, but we shall certainly be considering other methods of purchasing the vouchers in the future.
Some libraries encourage their borrowers to use IRCs also because the ILL department can retain complete control over the receipt and use of this form of payment. In many countries, all money received by libraries must be passed directly to the control of the budgetary authorities. While the IFLA Voucher Scheme requires no money to change hands while the vouchers are in circulation, it is true t hat a financial transaction is still required to purchase the vouchers initially and to receive a reimbursement on excess vouchers. Libraries that are net lenders (they supply more than they request) would be in a position of needing to redeem vouchers from time to time, and the refund cheque they received would have to be passed out of their control to the governing authorities, and no benefit w ould be achieved from making a charge in the first place. Any IRCs they receive can be taken straight to the local Post Office and exchanged for stamps and other postal services.
While the IFLA Voucher Scheme certainly overcomes many of the payment difficulties, it cannot possibly solve them all. It cannot hope to be able to subsidise libraries in less developed countries which cannot afford even the lowest of charges for ILL, let alone $8 or more. One of the options in the original proposals was to develop a scheme in which the richer libraries somehow subsidise d the poorer libraries, perhaps along the lines of the ASTINFO scheme in Australia, and even now it is hoped that the introduction of the Voucher Scheme will somehow benefit all libraries and not just the richest. In the ASTINFO document delivery Scheme, in operation since 1989, the National Library of Australia supplies documents to libraries in South East Asia at a greatly reduced price. The price of 6 Australian dollars per request is subsidised by Unesco funding at a rate of A$4 per request, so that libraries only need to find A$2 per request. Even at this greatly reduced rate, there is evidence to suggest that some libraries still cannot afford to pay for their requests, and of course the scheme relies totally on financial support from Unesco for its success. When the Unesco mo ney comes to an end, the future of the ASTINFO scheme is uncertain.
Similar problems exist in the IFLA Voucher Scheme. If libraries cannot afford A$2, they most certainly cannot afford US$8 per request, and the cost of the vouchers clearly puts the Scheme out of reach of a large number of potential participants. The IFLA UAP Office does not have the funds behind the Scheme to be able to subsidise the sale of the vouchers without financial support from other so urces, and as the ASTINFO scheme suggests, outside funding does little to help libraries in the long term.
With this in mind, we have recently been given financial support by IFLA HQ to support a small trial of the Voucher Scheme in a number of libraries in Francophone West Africa. We have been able to provide the libraries with a number of vouchers free of charge which we hope will enable them to participate on a more equal level in ILL. As well as encouraging participation in ILL, use of th e vouchers will provide valuable information on the pattern of document supply traffic generally in that region. (Information I still awaited as to whether the libraries have begun to use the vouchers yet).
Very many libraries in Eastern Europe have also shown great interest in the Voucher Scheme, but are in a similar position of not being able to afford to buy any vouchers. We are hoping that it may be possible to obtain funding to establish a similar trial between libraries in eastern Europe and Germany, since we have a number of libraries keen to become involved with the Scheme, and all w e lack is the necessary funding.
The Scheme is being run with almost no funding. We felt it was important not to charge an administration fee for participants in the Scheme, and therefore we have no direct income to cover running costs. Costs are being kept to a minimum, but there will always be bank charges to pay, printing costs for the vouchers, and staffing costs. The British Library generously provided financial su pport for a research post for one year. At the 1994 meeting of the Conference of Directors of National Libraries, members were asked to contribute a small sum to support the implementation of the scheme and to allow the development of the Scheme for a further one year. This funding runs out very soon, and we are constantly looking at ways in which the Voucher Scheme can continue to be run.
However the vouchers have been on sale since January 1995, and at the last count we had sold just over 2000 full vouchers and 1000 half vouchers. Support for the scheme has been growing rapidly, and we have had enquiries from hundreds of libraries. We are now beginning to hear that libraries are using the vouchers as currency, we have received second orders from several libraries, and very few vouchers have been returned for refund. We look forward to the time when they are recognised throughout the world.