Track 2: Leveraging Technology for Accessibility and Enhanced User Experience

Transcription:

Eden Temple (00:08):

Okay, so welcome everyone to our session. I don't know, I don't see that our PowerPoint is up here, but that's okay. Oh, there it's, I was going to say, it's only two slides anyway, so welcome. We're here to talk today about digital transformation in EBT and how the EBT industry is working together to launch new technology in order to enhance the user experience and access benefits. So my name is Eden Temple. I'm with the Food and Nutrition Service with me, I have Thomas Pennington with the State of Oklahoma, and Jamie Topolski, the Senior Director of Payment Products at Conduent. So welcome. Thank you guys for joining.

Tom Pennington (00:52):

Thank you.

Eden Temple (00:55):

Just a little bit. I know sitting in these sessions and listening to what the commercial industry is working on, it makes me feel a little bit bad that we're a little far behind, but let's try to celebrate some of our wins here. We've come a really long way from where we've started and we have a lot of excitement moving forward. So as Tim had mentioned in his earlier session, we've moved from paper coupons 40 years ago. In 1984, the first EBT pilot was launched in Redding, Pennsylvania. Not too long ago, 2019, we launched Snap Online. So we are making progress in the payments industry and we're continuing to work on this modernization of the EBT industry to keep up with the commercial industry and everything that they have been learning. So I like to do a little crowd work. So to start us off, let's do a little poll with a little, we can do the clappy clap. I can see you all, but we can do a little applause. So who has ever used a mobile payment such as the Apple or Google Wallet? Awesome. Who regularly uses these payment technologies?

(02:23):

A little less, but still. Good. Alright, so now everyone reach into your wallet, take out your credit card and pass it forward. Okay. Just kidding. You don't need to do that, but I'm sure you already know. And as we've been talking about through all these sessions, your credit card is equipped with that EMV chip and likely also the tap to pay technology. So let's turn to our panelists and see what the EBT industry is doing to modernize EBT and what is in the future for EBT, Tom, Jamie, what projects are in the works and how are they working to enhance the customer experience?

Tom Pennington (03:06):

So one of the things we have is online shopping. We've been mentioning that before starting in 2019. Part of the problem with that was we wanted our EBT customers have the same access, the same ability to use, but there were some problems. One of the problems that for EBT, you have to have a pin.

(03:25):

Having a pin online, if it was to be given to the retailer, now we have a chance where they could steal the benefits that, so we didn't want to give that, so that was a problem. So we've gone around that. We have some businesses that have actually give us a way so we can hide the pin. It doesn't get shown to the retailers. So that was one of the things. So we were able to do the online shopping. Of course, a part of that too is the, as she mentioned, the security code on the back, and we are working towards that to have that as a part of the steps involved in that. And it's just a way for us to enhance. Another thing in Oklahoma we've done is we've done where our farmers' markets, farmers' markets could not be a part of EBT until 2014 because then they could start accepting cards, but about in your state.

(04:15):

But in our state, most of our farmers' markets are in a parking lot. They're in a pole barn. And so the EBT machines had to be stuck to a phone line that wasn't good. So then we as a state decided we would work with our host processor and we would provide at no cost to the markets, those machines, and we actually went to wireless. And then in 2020 we upgraded those two more modern wireless so they could use a wireless, they can use a hotspot from their phone and those markets could accept SNAP in a better way.

Jamie Topolski (04:47):

Yeah. Let me just add one thing pertaining to online shopping that I think is important from a security enhancement perspective. So right now, pretty much every debit card and credit card that we have has a three digit security code on the back of the card that's used specifically for card not present transactions. So online shopping, some telephone transactions, things like that. That security code has been absent from SNAP card. So as part of the project that we have underway now to enhance the specifications to support the additional data that's necessary for EMV chip cards, we're also enhancing the specifications to support the presence and the addition of the three digit security code to the back of the card that could be leveraged for online transactions. And that's important for a couple of reasons. First of all, just to set some framework, sometimes it's called in the Visa MasterCard world, it's called the CVV or the C vvc.

(05:43):

In the SNAP world it's called the CAV. And so the code that would be on the back of the car would be a CAV too. And the benefit of that, as you've heard repeatedly, is that the theft is happening primarily through skimmers. So skimmers are able to capture very quickly, very easily and very cheaply the full track data that's in the magnetic stripe. And once they have that, it's so simple to make another fraudulent card. I mean, this is the easiest thing. You can buy the equipment for a few bucks on the eBay, it's that simple, but when you skim the magnetic stripe, you do not get an image of the back of the card. So even if criminals are successful at continuing to skim magnetic stripe cards, as soon as you add that three digit security code and the merchants who are doing a supporting online shopping can add that additional question to their checkout page, you really help to prevent the likelihood of online card fraud.

(06:37):

So it's an extremely important enhancement that we have coming that I think will help to prevent. Everyone asks, well, if you just do EMV chip cards, all the fraud will move online. It's not that simple. That doesn't happen. And this worth trying collectively to think ahead and make sure that we're not just closing one door and opening a window, but making sure the window's closed and locked too. So I wanted to add that about the online shopping. A couple of other enhancements. So again, this topic is accessibility enhanced user experience. We heard that Washington State supports the ability for people to lock their card in the mobile app. That's an extremely important thing. Unfortunately, it does place a burden on the benefit recipient to remember to do so. And there's some ways that we can help to encourage that through education, through reminders, through text messages, things like that, and make it easier to get in and out of the mobile app.

(07:32):

So you can use biometrics to get in and out of a mobile app very quickly and tap a quick button to lock or unlock a card. And also we are doing some enhancements that would allow to schedule an automatic relock. So what's really nice is that you can remember to unlock your card, but logistics, many of us may have an alarm on our house, but we forget to set the alarm when we leave our house sometimes, and it's useless at that point. You can implement lock my card feature, but if someone doesn't remember to go back and lock their card after they've done their shopping again, it's not going to help them. So being able to unlock and then set a scheduled relock 30, 60, 90 minutes down further down in the day, that's a real great enhancement as well to help make them a bit easier for the benefit recipients to utilize that feature.

(08:21):

So locking the card is crucial, the card lock and then also alerts, transaction alerts and account change alerts. So to be able to have someone sign up to say, okay, send me a text message or an email or a pop-up alert in the mobile app for every transaction that's on my account, whether it's money in or money out or any changes to my account information. So a change in my email address, a change in my pin, a change in my mailing address, any of these sorts of things that will trigger someone and say, wait, I didn't do that or I didn't shop there. That can help. It may not prevent every bit of fraud, but it certainly can help nip things in the bud, especially because fraudsters tend to test a card number first. First a low dollar amount before they really hammer it quickly to try and get all the funds off of it. So they'll do like a $1, $2 or a pack of gum type transaction first, and then they will quickly drain the funds as quickly as possible. So those are a couple I just wanted to point out and I'll pass it back for a few more.

Tom Pennington (09:23):

Yes, and I will add that, as was mentioned already, Oklahoma is moving towards having chip cards. It's part of our steps for the mobile wallet. As we were looking into and doing our request to do the mobile wallet, we were looking at the chip cards and we looking at QR codes. Some people were looking at that. One thing about QR codes that we saw some problems with that it was that the QR codes for the most part are static. I mean, people use them for coupons and they're very static, whereas we use a QR code for a purchase, you have to have a dynamic one for every account, for every transaction. Then the retailer's got to have the equipment that can either read it if the phone makes it or the phone has to read it. So the retailer's got to project that thing, that QR code.

(10:08):

And so we kind of went away from that. The technology is already out there for the chip cards since it's already there. We know it works. We know that it prevents fraud in a lot of ways and it would be an easier lift for our retailer partners. We felt like it was a better direction to go. That's why we went towards the chip. It's using the technology that's there. It's a easier lift for them on their recertification of their equipment and stuff. It's also, we, like all the other states have seen a lot of skimming. We've seen the algorithms by having the chip. It adds that tokenization that just because you have the pin and you have the pin, you still got to have that tokenization if you try to do that. And it's going to say, wait a minute, that's a chip card. I need your expiration date. I need the CAL two. As he's mentioned, it's going to need the tokenization. If you don't have that, well, you've got the pin, you've got the pin, wish you didn't have it, but it's not going to do any good unless you have the card in hand. And so that's why we are moving towards the chip card as a way to leverage that technology.

Jamie Topolski (11:11):

Yeah. I'll touch on just a couple of additional technologies that are interesting that you can consider for the future for your states and for future programs. So mobile wallet, obviously there is a pile underway, and the benefits of mobile wallet are a couple. First of all, it is when we're talking Apple Pay and Google Pay, it is an EMV transaction. So it has all the security that goes into an EMV chip card. It's the same type of security, the same dynamic data that comes with every transaction. When you tap your iPhone or your Android phone on the point of sale terminal, it really is indistinguishable. Whether it's a tapped card or a tapped mobile device, it's the same exact level of security. So it's great for that, but the incremental value there is the ability to provision cards out to someone's phone very quickly. So it could be potentially a really helpful technology in certain types of emergency situations.

(12:07):

So if there is a situation where you need to get benefits to a wider audience very quickly, and for some reason mail's interrupted or there's been a natural disaster and you need to be able to push cards to someone's mobile device, that is a use case scenario that you really can't meet through other forms of benefit distribution or disbursement. So just it's an interesting use case scenario. And then if someone needs a replacement card again, instead of having to wait for a week in the mail or something like that, that's a way again, to push out the replacement card. They can't maybe use it at every retailer because some retailers don't support contactless payments, but nevertheless, they could use it the allow the retailers until that physical card arrives when it's able to arrive. So mobile is an interesting use case scenario. Not a lot of states are looking at it yet, but it is something I think that can serve a really good purpose in the future.

(12:58):

And the second technology I just want to point out is the ability to disperse cards to have cards available for it incident issuance in your state offices or your county offices. Again, the idea that someone can walk into an office and be handed the card. It could be a temporary card that gets them through a certain period of time until they get a personalized card in the mail, or there is technology available where you can actually personalize and print a card right there in the office and be able to hand that to a benefit recipient as well. And again, those types of, again, it's very helpful to get someone assistance very, very quickly. It's helpful, again, in certain disasters or situations where you need to be able to get cards to a large number of people and maybe the infrastructure isn't there for the mail or express mail, things like that, overnight mail to be able to get things as quickly as you need to. So again, just a couple of additional scenarios where you could use technology really to enhance the experience and the security and the assistance for those who need the benefits. So I'll hand it back over.

Eden Temple (14:09):

Great, thank you. It sounds like you guys are doing a lot. What are you guys expecting when clients will be able to possibly add EBT cards to their Apple Wallet? Or maybe not when, but it sounds like it's still in the works.

Jamie Topolski (14:30):

Yeah, it is in the works. Well, first of all, the EMV technology is a prerequisite. So the ability for merchants to be able to accept, because as I mentioned, really tapping a contactless EMV card and tapping a phone that has Apple Pay and Google Pay with your card load from the merchant acceptance standpoint, they're really indistinguishable, but the merchant needs to be able to support that technology. And then the third party processors and anyone who handles the transaction needs to be able to route that additional data that comes with these digital transactions. So that's the framework or sort of foundation has to be built first. Then in addition to that, there's the technology that needs to be worked out to what's called provision the cards into the mobile phone, which is a challenge, a technical challenge.

(15:18):

If you think about it, it's hard to know that you receive a request to give a particular card to a particular phone. It's hard to know that, okay, this really is Tom and this really is his phone that's asking for the card. So there's some risk that you have to work through in terms of knowing if it's okay to provision that particular card to that particular phone. And that's something that, again, you have to work on standards and decision points, and then you have to work with what's called a third, a token service provider to be able to translate the actual card number. Doesn't go into your Apple phone, a proxy for that, which is called a token goes into your phone. It's the wallet in your phone. So you need a third party that translate basically is the intermediary to translate back from that tokenized account number to the real account number so you can debit then the proper benefits that need to be debited. So there's some work to be done.

Eden Temple (16:12):

Yes. So we know from the FNS update that the EBT community really needs to work together to implement growth in the EBT industry. So how are these projects being implemented and who are the primary stakeholders and how are they working together?

Tom Pennington (16:33):

So on some of the things that we've talked about, for example, the locking and unlocking Oklahoma is getting that this week, in fact. And so getting those things, the transactional alerts, the printing, the cards in the offices, some of the other things, we are doing that with our host processor. The host processor in the state works together. But then there's other things where you're going to have to have retailers involved and you're going to have to third party processors, and it's those people that get involved that you work with there. And I'll let Jamie talk more about the third party processors.

Jamie Topolski (17:08):

To make these types of changes, especially EMV and mobile payments and online enhancements to online payments. It really takes participation and agreement from all of the entities that are involved from end to end in supporting SNAP benefit payments and transaction processing. So it really does involve, especially for something like EMV, the POS terminal vendors, the merchants, the merchant acquirers and processors, the third party processors, the state processors, and of course the state and federal representatives as well, as well as I shouldn't leave out card manufacturers and card personalization bureaus. So you really need to get all these groups together, and that's why this X nine industry form that was formed is so important and so beneficial to everyone. And we have now, as of today, 455 members of this industry form, which is incredible.

(18:07):

It's really terrific. I love it. And it's amazing. We have calls every week, and without fail, there's anywhere from 140 to 170 people on these calls. It blows my mind that people are attending and participating. Obviously not everyone's talking at the same time, which is good, but there's people contributing every single meeting. And we are getting to consensus very, very quickly on a lot of really difficult and important issues. What's the ID that's going to be used on the card? So that point of sale Trum can recognize, oh, it's a snap EMV card. The message specification changes, and now we're working on things like what are the terminal risk parameters that need to be programmed because the card and the terminal have this whole dialogue that takes place and how's that going to work? And is PIN still going to be required? Always are just sometimes.

(18:59):

So these types of questions are extremely important. And to get everyone to agree, especially for the upcoming transition period, it's going to be a couple of years of transition for all the merchants to support this. And for the states that are moving quickly, we want to make sure that their cards function properly from the get go. So it's a great collaborative approach to getting these questions answered. There is no central authority. There is no equivalent of Visa, MasterCard, ams or Discover who get to sort of say by fiat, this is how it's going to go, and everyone must comply. So it really has to be a collaborative approach. Outside of the rule of interoperability, there's not a lot of hard and fast rules that we can lean upon. So we have to get consensus, and that's what we work on.

Tom Pennington (19:47):

And I would add to that, like Ron had asked about would be the fact that because we do have interoperability, not every state's going to be able to get there in time. We have to be able to have a fallback. And so we're working on that. Part of that is the fallback. If the chip doesn't work or if the retailer doesn't have a chip reader, then it'll fall back. They can still swipe that mag, but then now you don't have that protection. So who takes up that responsibility? Well, right now it would be us, whatever the replacement is, if there's more of that. But looking towards as we implement that and it becomes more widespread, maybe putting that on the retailers. If you don't switch to a chip reader, maybe you're going to be responsible for that being stolen. You have a skimmer where if you'd had the chip reader wouldn't have been skinned, it wouldn't have been effective. So there's those kinds of things too, working with them on that.

Eden Temple (20:40):

Wow. It sounds like the future can hold a lot of hopefully great things for the EBT industry. So I want to make sure we leave some time for questions, but how can people learn more or get involved? I know we have our little resources slide over here.

Jamie Topolski (21:01):

Yeah, definitely. Please, if you have, probably most of the people in this room are already joined that industry forum, but if you haven't, look, you don't have to attend any meetings. You just get an email whenever a new document is posted. And if you can't make a meeting, there's recordings available. So it's a WebEx, they do a recording. You can always request that from the X nine coordinator standards body coordinator. So it's a no brainer for anyone who's involved in any way with SNAP benefits to sign up for. There's no cost. It's incredible. You don't have to be a formal member of that organization. So it's free to participate. And like I said, we went very, very quickly from discussing at the end of last year what the spec changes were to getting the spec updated. And now it's with the A 11 committee, which they now have a ballot that's launched to get the voted upon. So there'll be a, it's still like a common period and potentially a second ballot, but it's moved very, very quickly and it's because of the good participation we've had.

Eden Temple (22:03):

Great. I will also plug the EBT Community council booth. So we have lots of flyers handouts there and folks that are definitely interested in talking about modernization in an EBT. So just real quick, so that no one leaves us during questions, I know we're all excited for wind down, but I can just, I've been to NextGen before, if folks don't mind hanging out like the EBT processors, the states and FNS, so we can do a little introduction, a little icebreaker that would be appreciated, and then we can all head out and we'll know each other a little bit better. But before that, I don't know if there are folks with questions for the wonderful panelists.

Audience Member Craig Hayes (23:03):

Hey, my question is for FNS, I'm Craig Hayes with the State of Wisconsin Policy Analyst. One of the things we've struggled with is USPS in general with getting people a card in a timely manner to give them an opportunity to participate. And there is some overlap here in terms of reissuing cards, when they've been cloned or when we know that they're frauded in terms of mobile payments, it's not something that I'm aware of that we're looking into right now. But in terms of mobile payments as an option for households, would that count towards us helping households meet the requirement to participate in terms of getting them a card in their hands, like if we were to get them a digital version of a card? I don't know if that's something you can answer or not, but kind of left field.

Eden Temple (23:52):

So I don't know that I can necessarily answer that. I will say currently, as we have our mobile pilot request for volunteers written, the expectation is that there is also going to be a physical card. And Jamie, correct me if I'm wrong, but you would need that physical card to load that into your wallet. So in terms of, I think definitely in the future, that's something that we can look towards having digital cards to be able to get folks the ability to get their cards faster and things like that. Does that answer your question? Or I don't know if any, okay.

Tom Pennington (24:30):

And I would say that that's where Oklahoma is headed, that we want to have the card because of interoperability, because not everybody's there. We still have to have the card, but if we can get to a point where it's spread across, then yes, we would like to be able to down the road. I mean, we've already had talked with our host that phase two, phase three down there. We want to have a digital card where we don't even have to give out a card.

Audience Member Craig Hayes (24:55):

Thank you.

Jamie Topolski (24:56):

And there's two levels to mobile. There's multiple levels to mobile while implementation. But usually the way you progress is initially you allow the cardholder to enter their information, either typing the numbers or capturing it with the camera, but ideally, longer term you have what's called push provisioning, where the state or the processor is able to proactively push the cart into Apple Pay or Google Pay without any involvement, direct involvement from that individual. And that's when you really get to that point of saying, okay, we don't even need to. And you start to see some cutting edge fintech's to offer that when you open that, say a new online bank account or something, some of them, a small number, are able to do that and push it into your mobile wallet very quickly. Yep.

Conference Support Team (25:46):

Okay. We have time for one more question.

Audience Member Andrew Robinson (25:51):

Andrew Robinson, EBT manager for the state of Maine. My question is for Jamie. Jamie, we've been seeing what little, I feel bad asking a question because Maine has very little skimming compared to other states. But what we are seeing is the algorithms we're getting hit with the algorithms. We see them using the big box retailer down in Arkansas, checking pins, denied, denied, denied. The next day they tried denied. We finally found the pin that works, and then they wiped the card. What technology can we utilize to combat the algorithm scammers?

Jamie Topolski (26:30):

So we are limited in our ability to deny transactions. So we do try and detect, well, first of all, obviously we're trying to prevent use of weak pins or soft pins, that's crucial. And we also are working with certain retailers that are experiencing high volume of pin checking or denied pins. But in the traditional, say, debit or credit transaction processing world, you'd have fraud analytic system that is able to do a fraud scoring of transactions to say, based on what I know about this individual and what their normal transaction history is, this particular transaction is likely to be fraudulent. So we may go ahead and decline when there reaches a certain threshold of a fraud score. That sort of decisioning isn't really supportable currently under current rules for SNAP transactions, DBTs transactions. So we're a bit limited in our ability to do that type of scoring thing.

(27:34):

The introduction of EMV though really does help a lot because it really introduces dynamic data into every single transaction. So it makes it much more difficult for someone to keep hitting up the same card again, unless they physically have the card in their possession, they won't be able to do that at all. And so again, once we get the merchants over to the EMV standard, I think that should help that. That's the best I have for right now, unless there really is a change in the rules that would allow us to do more fraud scoring. But that's always challenging because then ultimately, who is responsible then for fraudulent transactions? So it's tough. We're in a bit of a bind.

Eden Temple (28:15):

And I'll plug again, especially if that algorithm fraud is being used online, that card security code on the back of the card, that expiration date, and hopefully folks moving towards that in the future will be additional levels of security to help prevent that. So I think we're all out of time, but thank you everyone so much for coming. Again, if the EBT processor states and FNS can stick around so we can do a little icebreaker, that'd be great. Before we all head out for, we'll wind down, wind down.