While there appears to be latent demand for mobile apps from constituents of government prepaid card programs like SNAP, WIC, and TANF, there has still be very little adoption by government agencies despite robust citizen engagement technology being available today.
Here are a few misconceptions that are worthy of dispelling, as the industry starts to evolve with this technology.
- Mobile apps are a luxury and will create bad impressions that tax dollars are not being used wisely by these programs. False!
The best kept secret of serving consumers via mobile apps is that it is more cost-effective than any other channel. This is why banks were the first to deploy mobile apps on a broad scale. The cost of a transaction in a bank with a teller is around $4 per transaction. The cost via an ATM is around $0.85 per transaction. The cost via a mobile app is less than 17 cents per transaction [according to a WSJ article]. The same order of magnitude difference in cost has been achieved in other industries as well. When is the last time you stood in line at a check-in counter to get your boarding pass from a ticketing agent? So mobile apps are actually not only a preferred channel and a better customer experience, but they are the most cost-effective way of serving constituents.
Those that need benefits of SNAP, WIC, TANF, and similar benefit programs are disadvantaged and working poor. They cannot afford mobile phones let alone smartphones. Untrue
Our data shows that more than 70% of inbound calls to contact centers servicing this population of underbanked consumers are calling from mobile devices, and Pew Research Center data suggests that two thirds of these mobile calls are coming from smartphones. The truth is that many of these disadvantaged constituents use a smartphone as their only means of access to the Internet, which is critical to their ability improve their situation for everything from basic communications to researching jobs.
In fact, In fact, the same Pew Research indicates that households earning less than $30,000 annually are nearly twice as likely to use a smartphone to look for a job, and four times as likely to use their smartphone to submit a job application. Data shows that more than 30% of smartphone purchases were made by persons with incomes less than $30,000/year. In fact, additional Pew Research Center research from July 2015 identified that 68% of U.S. young adults age 18-29 own a smartphone and roughly 9 in 10 U.S. adults own a mobile phone, and 73% of all U.S. mobile phones are smartphones. In a Contact Solutions survey conducted in December of 2014 of EBT participants, 98% of those surveyed indicated that their mobile phone was their only phone, and only 4% of the respondents had their phones issued by the government. Results and preferences are clear.
Mobile phones are less secure than other means of serving constituents, and more subject to fraud. Totally off base!
A smartphone is essentially no different than a computer communicating across a network, so the risks are no worse than offering self service via the web. At Contact Solutions, our mobile apps that support EBT programs keep all sensitive data in the same PCI, SSAE-16 compliant private cloud environment that our cloud-based IVR system operates in. On the smartphone side of things there has been much in the news about jailbreak phone hi-jacking, and malware attacking the operating systems of Android phones in particular.
While it is true that operating systems are newer and less protected, this does not necessary translate into a greater risk, because the smartphone is linked to an individual, almost playing the role of a token as one element of multi factor authentication (e.g. something you know, and something you have). Thinking about the logistics for the fraudster, taking over accounts through smartphones using jailbreak software is the modern day equivalent of pickpocketing to get an individual’s prepaid card. It may happen, but it is far more effective to take over accounts in massive operations run by fraudsters attacking traditional IVR systems. Sensitivity to security of mobile phones is prudent, but in reality it is the same sensitivity that needs to be applied to the web or IVR.
The demographics using EBT programs are not as tech savvy as the broader population for which digital consumerism is thriving. Mobile apps are a nice to have for this population, but high levels of adoption are not expected. Proven wrong!
According to the U.S. Census data, this year the Millennial generation is projected to surpass the Baby boomers as the nation’s largest living generation. With many of those constituents hitting the work force during the great recession, a hard look at demographics around these programs is warranted. Based on program data at www.snaptohealth.org, 76% of SNAP benefits go towards households with children.
Looking at callers into the Contact Solutions IVR, which amount to 120M calls per month, we find that the proportion of callers that use mobile devices for the Direct Express social security program is identical to Starbucks, at 71.4%. Think about it. The assertion that adoption will be low due to demographics just doesn’t hold water. In our short pilot with one state EBT program the targeted recruitment was 5000 users. By the time the pilot had launched there were more than 10,000 users. Without any additional promotion there were 12,000 users by the end of the 3 month pilot. A few months later registered users climbed to nearly 20,000 users with no additional promotion.
- All cardholders need is self-service through a mobile app. In-app customer service capabilities to interact with a live agent do not add as much value for “this type of mobile app user.” Data says not true!
Even companies as advanced as Starbucks, who have a slick mobile app, still get 1,000,000 calls per month into their contact center. Banks that have invested untold millions in their mobile apps have nearly 25 Billion customer care minutes on the phone every year. This is a good indication that self-service mobile and web apps alone will not service 100% of cardholder needs. For most commercial enterprises today, when this need for more assistance occurs the consumer only has the option to email or use their smartphone as a plain old phone to place a call into the contact center and speak with an agent.
More advanced companies have started to provide in-app access to a live agent via messaging, which provides a much more cost-effective way of addressing cardholder needs than the mobile app. This is far more efficient and less costly than causing the user to leave the app and make a phone call, where they will have to wait on hold for an agent for up to 30 minutes, and then start all over explaining to the agent what their problem is. Recent data from ContactBabel suggests that “chat” costs $3.64 per interaction, while email costs $4.14 and a phone call costs $6. So web chat is 60% less costly than a phone call.
An in-app text messaging approach like My:Time™, a comprehensive digital engagement solution that includes both self-service and live assistance, is even more cost effective than web chat because it allows a conversation to be asynchronous like text messaging—with the full context preserved for the cardholder and the for the agent, improving the efficiency with which they can respond and allowing problems to be solved without keeping the cardholder on the line while incurring telecommunication costs. The cardholder can go on about their business and get a notification when the agent is available to resolve their issue. The impacts to agent efficiency and cardholder experience are enormous.
The misperceptions above have caused administrators of government prepaid card programs to lag behind their commercial counterparts in implementing mobile app-based customer care, but we believe that the latent demand has hit an overwhelmingly high level. Thankfully, the States running card programs, their contractors and vendors that are staffing contact centers, and the citizens being served all stand to benefit from the transformation ahead.