A 3-Step Approach to Launching a Pandemic Relief Plan
An Interview with Kyle Ruschman at Usio
Governments around the world are reinventing and reevaluating the way they disburse money to community members throughout the country. Usio and Mastercard have collaborated with many organizations in the City Possible and Mastercard City Key™ ecosystem to develop efficient and transparent platforms and best practices to help achieve that goal.
As part of the evolution of that ecosystem, Mastercard is launching the Mastercard City Key Partners Program, of which Usio is currently a member. The Partners Program is a resource City Possible Global Network member cities can access to find technology partners who can help with managing disbursement programs.
We sat (virtually) with Kyle Ruschman, VP of Sales and Business Development at Usio, a leading FinTech providing integrated payment solutions and an innovative card issuing platform, to discuss a 3-step approach for creating and launching successful program.
Q: You’ve worked with multiple governments over the last year, addressing a mix of challenges related to pandemic relief, financial inclusion, emergency disbursements and more. What do you see as some of the biggest challenges cities have faced?
Cities and nonprofit organizations are trying to evaluate the quickest and best way to get money to community members in need during these difficult and unprecedented times. Research shows that approximately 25% of households are either unbanked or underbanked, and Usio has resolved this challenge primarily with our Mastercard prepaid card solutions.
There are multiple product solutions to accommodate various circumstances, such as distribution by paper check, ACH to an existing bank account, or by sending funds via Western Union, Moneygram or other money transfer service. To ensure complete financial inclusion, we focused on utilizing our proprietary card issuing platform to solve all challenges. Cards can be mailed directly to Community Based Organizations (CBOs) or NGOs so they may distribute directly to the recipients since some may not have a permanent address. Cards can also be mailed directly to the recipient’s home as well. In situations like this, we’ve developed security measures to make sure the intended recipients receive their cash assistance.
It’s also important to note that cards can be restricted so it cannot be used at certain types of businesses by MCCs or MIDs, such as liquor stores, entertainment venues, gambling sites, etc. Our product’s flexible solutions also offer the ability for the CBO or NGO to reload additional funds, allow for cards with and without cash access and distribute virtual cards sent directly to a recipient’s phone or email address, which may be provisioned into a mobile wallet for safe and secure contactless transactions.
Q: Having worked through a broad variety of challenges, I’m sure you’ve learned a lot along the way. How has your engagement and planning model evolved?
With so many families and communities in dire need of financial assistance, we tried really hard to simplify the engagement process with our partners in three simple steps: Plan. Build. Measure.
We realized that our current disbursement card product had a few limitations during the planning stage. Initially, the maximum amount that could be loaded to one of our anonymous cards was $2,500. Additionally, this was limited to transaction purchases only and did not offer cash withdrawals from the card, unless cardholder information was collected. We found that many organizations had a need to disburse higher amounts of assistance to families, of up to $5,000, and also needed to maintain the privacy of the recipients.
We reached out to our issuing bank, Sunrise Banks, to update our program terms and conditions, allowing for cash access, while maintaining the privacy of the families, since the source of funds was a verified organization. We also worked in conjunction with Mastercard and the AllPoint Network, to offer recipients access to almost 55,000 surcharge free ATMs around the world, so cardholders have the ability to withdraw funds without any additional ATM surcharge fees from third-party ATM owners.
During the building stage, it was important to lay out and highlight all of the product controls that an organization, municipality, non-profit, etc. has access to within our proprietary platform. Do they want to offer cash access or do they want greater visibility into the spending needs of families by merchant categories, such as food, medical needs, making utility payments, etc.? Do they want to the ability to send out cards digitally to an email address or directly to someone’s phone in order to receive funds immediately? Is it important to have their brand or organizations name visible to their community members?
Lastly, what are the critical success factors needed to measure the success of the program to ensure that all funds are being spent and is it important to have access to this high level aggregate data on the total funds loaded?
Q: What are critical considerations for the PLAN phase of the process?
During the planning phase, Usio leverages our experience in the prepaid card space coupled with our innovative technology to map out a product that meets the needs of the respective organization and the families it serves.
We ask fact-finding questions to determine the goals of the organization, as well as the needs of the recipient and timelines for funds disbursement. During this phase, we determine which product will meet those goals and which ancillary features we will execute, such as co-branding the organization name on the card, mobile app and website, restricting select merchants, whether the program will be a physical or virtual card and how the recipients will receive their cards (via mail or in-person).
Q: What are critical steps for the BUILD phase of the process?
An experienced implementation team guides our partners through the process from start to finish. In this phase, we build and execute features discussed in the planning phase, as well as securing approval from the bank for the program and any marketing materials, working through the funding and training processes, addressing customer service needs and ultimately, ordering test cards to ensure the product is ready for full distribution to recipients. We will provide access and training for our Usio Debit card portal to view reports and card data. We also have various options for card orders, including access to APIs to submit orders. Additionally, we can handle the order process on behalf of the organizations we serve once we receive order details
Q: What are critical success factors for the MEASURE of the process?
Once the program has launched and the cardholders receive their distributions, Usio offers several tools for measurement. These include a variety of reports which may be pulled and exported at the convenience of the partners and reflect a variety of details, including lists of all cards ordered, their issuance and activation dates, balances and initial load amounts. Partners may also request monthly reporting, demonstrating the merchant category codes (MCC) where cardholders spent the funds. (Grocery stores, for example, typically represent 30% or more of the cardholder purchases).
Q: Is there a recent project you can point to, that you feel illustrates the approach you mentioned? Please walk us through it.
There are many programs we could highlight to illustrate the value of our platform, but the one that sticks out the most is our engagement with Community Cares Partners, (CPP) which is a program of the Communities Foundation of Oklahoma.
This was one of our city/state partners we met during our work with Accelerator for America. CPP decided early on in their planning stage that they were going to limit the spend of their $3.3mm to a select number of Merchant Category Codes (more than 50, including grocery stores, discount stores, restaurants, family clothing stores, etc.).
Throughout the process they noticed that some of the cardholders were trying to use their funds at auto repair shops and some specialty healthcare providers. They asked if we could update the MCC codes for the program to allow for these transactions to be accepted. Within minutes, we were able to “open up the hood” of our platform and update these categories so their members could get their cars repaired and families could pay for their necessary medical treatments. The other exciting things we noticed, is that more than 98% of all the funds loaded to cards were spent, and almost 91% of the funds were spent in the first 45 days.
A few other data points to share are as follows:
- 38.5% spent at Grocery Stores, Supermarkets
- 12.4% spent at Discount Stores
- 11.3% spent at Family Clothing Stores, Variety Stores (Family Dollar, for example) or Shoe Stores
- 10.2% spent at Eating Places, Restaurants or Fast Food Restaurants
- 7.1% spent at Service or Gas Stations
- 2.6% spent on Telecommunication Services
Thank you, Kyle, for sharing your time and insight!
If you’d like to learn more about Usio, please feel free to contact the Usio team. Likewise, you can also learn more about Mastercard City Key or the Mastercard City Key Partners program by reaching out to our City Possible team here.