Q&A with Walt Granville, Cachet Financial Solutions
No more “one and done.” That’s central to Cachet Financial Solutions’ mission for its prepaid clients and was the impetus for platform upgrades that were nearly a year in the making. The Minneapolis-based technology provider unveiled the enhancements to its Pay Award-winning Select Mobile Money platform in November. They enable program managers to design and launch customized branded apps and acquisition sites more quickly, as well as provide cardholders with a number of new features including international money transfer service inside their apps. A majority of Cachet’s existing clients have committed to migrating to the updated platform and three are in the process of doing so. Paybefore spoke with Walt Granville, senior vice president of mobile innovation, about what’s resonating with clients and how Cachet is using optimized mobile apps to help them fight churn.
Paybefore: With the latest upgrade to your Select Mobile Money platform, you’re promising lower deployment costs, while increasing speed to market, prepaid usage and brand loyalty. Those are big promises. How are you able to deliver?
Walt Granville: Let’s back up a little and talk about the thinking that went into the platform. One of the things we’re heavily focused on is the potential of prepaid. What’s happening in many cases is either issuers or program managers are struggling in a couple of areas that are critical to success. One thing that’s limiting prepaid providers is that they’re leveraging generic products from the core processing environment—things that weren’t specifically geared toward prepaid. They can be used for prepaid, but it’s suboptimal because they were originally designed for debit or credit. We wanted to build a very specific prepaid product that solves problems for the prepaid card issuer and program manager and ultimately solves problems for their customers.
The second piece is that you have to think much more broadly than just adding mobile banking to the platform. We wanted to add a greater level of feature functionality, so our clients can optimize the user experience to make it easy for cardholders to use the app and, by extension, their cards. At the same time, the reason that the cost of deployment is coming down is that we’ve created administrative portals that enable clients to customize their mobile apps and acquisition Websites, and I’m not just talking about dropping in logos. They can easily go in and set up a new mobile app and deliver a customized experience with different features based on the specific cardholder needs.
Paybefore: Customization sounds expensive though. How are you cutting costs?
WG: By operating off of a single common code base that serves multiple apps, we don’t have to do a separate build, release and deployment for each and every one of our clients’ app releases or updates. In other words, as a program manager you’re able to go in through the administrative portal and set up applications for the customer, turn features on and off and customize the branding to configure a new app within 10 to 20 minutes, tops.
|“We know if you can get customers active in the mobile application, they stay longer. We have numbers showing it’s double or triple the average lifetime of a non-mobile app user. I don’t know that it’s unique to us, but it speaks to the power of having an engaged customer and giving them what they want.”
Paybefore: How long did it used to take to launch a new app or release a new feature on an app?
WG: We can put a new app in market in a couple of hours. It used to be 90-plus days. We’ve created a ton of efficiency. From a program manager’s perspective, if I have five apps out there and I’d like three of them to have money transfer, I can do that almost instantly rather than having to build it into the apps one at a time. Think about how that efficiency comes into play if you have even more programs that you support and you want to create customized apps for, say, 40 different entities you sell through.
And from the cardholder standpoint, if it’s an app that’s already in market that gets a new feature, like money transfer, that would be part of a regular app update. Cardholders wouldn’t have to download a new app to get the new features.
Paybefore: So, are you the processor or working with the processor?
WG: In most cases we’re integrated with processors either on behalf of our program manager clients or we work directly with processors, acting as their mobile tech partners.
Paybefore: How does your platform translate into greater usage and loyalty for your clients?
WG: I spent the better part of 10 years in loyalty, so I’m steeped in the points business and real-time couponing. There are a couple of different dynamics in prepaid that require us to act differently. The economics of prepaid are not the economics of credit and not even the economics of DDA. There are a couple of different types of loyalty. For example, I get points and even though I might hate a specific airline, I’m vested because I have points. Then you have loyalty with a brand like Target, Disney and Amazon. They treat me well, give me things beyond the product and they’re big on customer service. They really go out of their way for me. I feel like the prepaid industry has an opportunity to take a similar approach and really service the customer. What challenges are they facing and why aren’t they using the product more? That’s where our mobile platform comes in.
One of the biggest areas of improvement is getting over the hump on reloading the card and bringing extra value and convenience that can be accomplished, in large part, in the mobile channel. We’ve invested heavily in our technology. With mobile, I do think you can engage and educate customers and give them the ability to reload a card through mobile deposit capture and money transfer and other channels. It’s about engagement and convenience, but it has to be done right.
A lot of people offer mobile apps and a fair number of those have international money transfer, but the problem is that it’s built in such a way that it’s difficult for the customer to use. They’re not going to use the service, whether it’s money transfer or bill pay or something else, unless it’s convenient.
Paybefore: Can you give some examples?
WG: Retaining customer contact lists is one. So, when I want to transfer money, it’s three or four buttons. The information for my recipient is already there. You have to make it easier than going to the store or going to the Western Union Website. You have to solve problems for that individual and make the mobile app sticky and valuable to everyday life. If you do that, customers will pay a little bit more.
We see a lot of opportunity to combat the “one and done” mentality out there. In many cases, reloading a card is harder than buying a new card.
Paybefore: Why aren’t people reloading? Is it because they don’t want to go through KYC?
WG: I think the problem is that historically the product marketing was so focused on convenience that it led consumers to buy cards for one-time use. It’s easy to buy a card and use it, but reloading the card is difficult to do. Have you ever gone through the reload process? It’s illogical. If I have a prepaid card, I have to buy another card and then go home and move money from one card to another. Isn’t it just easier to go grab another card than to reload it?
So, I think the industry has to make reload easier and educate and re-educate consumers—give them more reasons to retain the card. Explain how the mobile app can provide your balance information, here’s how you reload, here’s a coupon and value-added services that expands the utility of the card.
Paybefore: What kind of results have your clients seen when they optimize their mobile apps?
WG: We know if you can get customers active in the mobile application, they stay longer. We have numbers showing it’s double or triple the average lifetime of a non-mobile app user. I don’t know that it’s unique to us, but it speaks to the power of having an engaged customer and giving them what they want.
We’re just at the tip of the iceberg when it comes to using the mobile app to drive stickiness in prepaid and reducing the burden on the call center. We’re working on bill pay right now, but you can’t just offer bill pay and expect cardholders to use it. Even in the DDA world, many people still pay their bills on the desktop rather than the phone. It’s difficult in the mobile application. We are looking at how to make it the most convenient environment, so we’re giving cardholders a rationale to come back.
Paybefore: What about the rise of chat bots we’re seeing? Are you investing in that area?
WG: We’ve had some clients approach us about a customer service chat bot. We don’t have it on the road map right now, but we have two programs looking at AI-supported customer service and we could be in the market with that by 2018.
Paybefore: What other growth areas are you investing in?
WG: We’re looking at providing additional service elements that allow customers to, for example, create an email to program providers with all the transactional information they need to challenge an improper charge. We’re also investing in features like giving cardholders access to their credit scores and a host of other features. The important thing for us is not only to create value for the cardholders but to make it easy for program managers and issuers to add those customizable, sought-after features efficiently.