Using Mobile Technology to Drive Financial Inclusion with Direct Express ®

by Andrew Gillen 0

April is National Financial Capability Month in the U.S., a time for us to focus on efforts to promote resources that help Americans make informed financial decisions. MasterCard supports financial capability initiatives around the world, and, in the U.S., we have focused a number of efforts particularly on the Direct Express ® program. This program, a partnership between the U.S. Department of the Treasury, Comerica Bank, and MasterCard, provides several million Americans with a safe and reliable way to receive federal benefit payments electronically on a MasterCard prepaid card. The vast majority of these cardholders are unbanked, and many are totally disabled, making them among the most vulnerable Americans—and among those with the most to gain from increased financial capability.

Access to information about one’s finances is essential to financial capability. In late 2014, Treasury, Comerica, and MasterCard agreed that the time was right to offer Direct Express cardholders a new channel—a mobile application—to access information about their accounts. A number of insights drove our team to this conclusion. Prior to the development of the app, the easiest way for a cardholder to access this information was through a toll-free telephone call to an automated voice-response unit. While this was adequate when the program began, we knew we could provide greater convenience with an app.

We also concluded that by giving cardholders easier access to account balance information, we could promote increased use of the card as a payment tool, rather than a cash-access tool. This, we hoped, would drive financial inclusion and financial capability, as cardholders would enjoy the safety and security benefits of cards vs cash, increase their ability to transact online, save money on fees, and generally participate more fully in the full range of economic activity most Americans take for granted

We also knew that while Direct Express cardholders’ rate of smartphone ownership lagged that of Americans overall, it was growing dramatically. As recently as 2011, our annual cardholder survey revealed that smartphone ownership in Direct Express was below 20%. By 2014, however, we could see that we were on the verge of achieving 50% smartphone ownership within a year.

Direct Express

One of our team’s guiding principles in delivering services to Direct Express cardholders is to “meet them where they are.” We mean this literally: For example, we offer tens of thousands of convenient surcharge-free ATM locations in convenience stores and discount department stores. We also mean this metaphorically, “meeting” cardholders where they are in terms of financial capability with our education platform, PayPerks. With the building “critical mass” of smartphone ownership, we agreed that the time was right to meet our cardholders there, too, with a mobile application, totally free of charge, of course.

And Direct Express cardholders have been happy to meet us on their mobile devices; they have embraced the new app. Within a few months of the “soft” launch (in August, 2015), we conducted a telephone survey of users. They reported 98% satisfaction with the app—even higher than the satisfaction score for Direct Express overall. As of late April, 2016, the app has a 4.5 rating on the Google Play app store—higher than leading social networking apps, and much higher than many leading banking apps. With this new option available for account information, we are seeing a significant migration away from the dial-in voice-response unit: Our preliminary analysis indicates a significant decrease in calls to the automated customer service line among those who adopt the app and find it more convenient.

We are proud to work with our partners at Treasury and Comerica to serve millions of underserved and disadvantaged Americans through Direct Express, and we are encouraged by the initial successes with this mobile application we have developed together. We are excited to bring its benefits to many more Direct Express cardholders, as we now move into the next phase of the project and more broadly educate cardholders about this new option.

Andrew Gillen is currently Vice President for MasterCard’s public sector prepaid card business. Prior to joining MasterCard, he served in the federal government at the White House Office of Management and Budget (OMB), and in state government at the State of New Jersey Department of the Treasury. In addition, Andrew led sales and relationship management teams for a major commercial card issuing bank, focusing on GSA SmartPay® and other public sector payment card programs. Andrew is a Phi Beta Kappa graduate of the Schreyer Honors College at the Pennsylvania State University. He also holds an MBA from the Kellogg School of Management at Northwestern University and a master’s degree in Government Administration from the University of Pennsylvania, where he has served as an adjunct member of the faculty.