Apps for SNAP with Both Green and Yellow Lights Flashing

Citizen Wealth Financial Justice

New Orleans   An internet application that would allow food stamp recipients participating in SNAP, or Supplemental Nutritional Assistance Program as the government calls it now, seems like a great idea.  A Brooklyn-based startup called Propel created an app that allows recipients to check on their smartphones and see how much of their benefits they have spent and how much they have left.  The app also has coupons for food stores, supposedly offering more nutritional products, and in some states has job postings.   Sounds like a winner for lower income families at first blush, so green light and go for it.

There’s no question we need the techies to start thinking of the best ways to provide better access and information to people receiving services, especially low-and-moderate income families.  The food stamp program is a great place to start. Over forty-four million people participate in the program now so this is a big-time operation.  Of those recipients about 44% or twenty million are children so the potential pool for smartphones giving access to such information is about twenty-four million.  Maybe half that number actually have smartphones, although that may be a kind estimate given the persistence of the digital divide, but being liberal that would mean perhaps twelve million have smartphones now.

Propel claims it has one-million users.  In a study with Duke University, Propel found that on average SNAP recipients spent more than 80 percent of their SNAP benefits within the first nine days, completely exhausting the sum by day 21. But when given an in-app tool that showed them a weekly budget instead of the entire balance, users stretched their monthly balance by two days—about six meals a month.

An article in The New York Times paints them as the good guys and a Xerox $6 billion spinoff named Conduent as the bad guy bullies.  The Propel app is a “skin” that is built on top of platforms provided by Conduent and other governmental subcontractors of state governments that provide Electronic Benefit Transfers to benefit recipients.   Most of the food stamp delivery systems are provided by two companies, Conduent and Fidelity National Information Systems known as FIS, a $9 billion company.  Conduent has contracts with twenty-two states that I could identify from governmental information.  FIS has most of the rest of them.  Propel tells the Times that FIS is no problem, but Conduent is.  Additionally, Conduent has rolled out a competing app that gives basic information in South Carolina, Oklahoma, and Utah with more information coming.

Looking at the state contract specifics for Conduent, I found that in several states their web design allowed access to a wide range of benefits from TANF to energy assistance and more, which many of us for years have felt is the Holy Grail necessary to get increased maximum feasible participation in benefit access.   Because Conduent has state contracts it is also regulated, which Propel and its competitors are not.  As much as my kneejerk response was to root for the little guy versus the big boys, a yellow light is slowing me down even as I was flooring the car on green.

Partially, it’s the business model.  Propel can’t sell data obviously since food stamp recipients are protected by an array of confidentiality laws at the federal level, so they deserve no special applause that is inferred in the Times’ piece, since none of these primary contractors can either.  The Propel business model is advertising, coupons from the food stores, and job postings.  I find none of that reassuring. Frankly, the income sources for the company need to be regulated as well when the potential to exploit these vulnerable populations lies behind every one of these sources.  Equally obvious is that state governments should be insisting that its contractors like Conduent and FIS should be providing the kinds of features that Propel is promoting to recipients free and clear now that Propel has shown their value.  Propel may not like other businesses playing hardball, but I don’t like government not stepping up to its full responsibilities to serve their citizens, especially lower income families.