A new digital payment product: California Department of Rehabilitation partnership with WEX

Lori Bruno has worked at the California Department of Rehabilitation (DOR) for over 28 years, most recently as the Chief Accounting Officer. For many of those years she has known that DOR was sitting on a golden opportunity to transform the way vocational rehabilitation consumers could pay for goods and services needed for their employment plan. In late 2021 DOR partnered with WEX, and Lori, along with a whole team of champions, developed a new way for their consumers to pay for authorized goods and services, drove change, and created a new efficiency and a cost-savings for the organization.

What does DOR do?

Every state in America has a vocational rehabilitation program. California’s DOR “assists Californians with disabilities to obtain and retain employment and maximize their equality and ability to live independently in their communities.” This entails every aspect of landing a job from training to the tools required to even learning what to expect at a job interview.

The history of DOR’s payments methods

One way DOR assists its consumers is funding many of the items needed for on-the-job training and classroom work. For the past nearly three decades of Lori’s tenure at DOR, these funds have been distributed or reimbursed through paper checks, bank drafts, and other onerous, administrative-heavy methods of payment. “We all use cards now in our personal lives. I couldn’t even tell you the last time I wrote a check. But we were continuing to issue checks to consumers on a regular basis.” These payment methods created unnecessary headaches for DOR consumers and employees alike. As Lori shared, “Over the years that I’ve been here, we’ve been hearing from employees from various district offices throughout the state who were saying, ‘There’s got to be a better way for consumers to go out and purchase the items they need for their employment.’” Lori decided to take on the challenge and lead a team to overhaul DOR’s payment options and associated systems and processes.

How DOR’s team developed their plan to switch to digital payments

Lori and her team considered a number of factors before proposing to their leadership team a recommended operational change. One factor they took into consideration was the unique demographic they serve: many of DOR’s consumers do not hold bank accounts. Issuing payments to an unbanked population adds complexity to the process as it eliminates some potential tools that Lori and her team could have implemented: electronic funds transfer (EFT) is one example of such a tool. After much research and discussion, Lori’s team decided to develop a tool similar to a debit card for their consumers and put together an Invitation to Bid (IFB) to find a company with whom they could partner.

Finding a trusted partner to develop a customized solution

Lori and her team were introduced to WEX through the RFP process. They looked at WEX’s suite of benefits products as a leaping off point, knowing that a customized solution would need to be developed. “The vocational rehabilitation program is a unique service – it’s not a benefits program. It’s supposed to provide required items necessary for eligible individuals with disabilities to achieve their employment goals.”

Lori quickly found she could trust WEX’s team to collaborate on this new phase at DOR. “In our relationship with WEX from day one when we signed that contract, we could see that there was an interest in and a desire to meet our business needs and really think outside the box about how this is what we do today, but here’s what we think we might be able to do for you tomorrow.” Lori had a vision and she had found a partner in WEX to help her execute that vision.

Going through the discovery process to outline a plan

WEX’s Mindy Flack joined as project manager for DOR and the first step she took was to embark on a discovery process. “Discovery is where we take the time to ask a lot of questions and understand the objectives of the project. What are those pain points in the way a business operates today, and what is it they’re looking to change? We then identify what we can do to get them to their ideal state.” Mindy believes the discovery process is the key to any project’s success.

Developing a program allowing for better data collection

During discovery, data access and data analysis were raised by DOR as project objectives.  Specifically, identifying and collecting data on purchased items was important to the team, whether it be a service like tuition and exam fees, or goods like books, supplies, clothing, or job tools. Additionally, payments controls needed to be implemented to give DOR visibility into what money was being spent, by whom, and for what. “We needed to have a card that provided a payment solution that wasn’t set up like a credit card but was set up more like a payment card with funds loaded by DOR for specific types of authorized goods or services. We needed to find a financial services provider we could partner with to produce this card, administer the card program, and release it to consumers directly.”

Another key factor for the DOR team voiced during discovery was ease of use. Lori wanted to provide consumers with a card that could be used anywhere. “WEX already had a relationship with the State of California which made the whole process a lot easier. WEX provides our gas cards to the State. They were a known and trusted entity.”

Flexibility and creativity lend themselves to out-of-the-box thinking and innovation

Over the course of the next several months, Lori and her team met regularly with WEX and hammered out the payment card design plan. The cross-functional team developed a workable solution to launch a test pilot of its new CalDOR Payment Card in Napa, California. “We were able to get up and running within three weeks. WEX walked us through their system, what their administrative portal looked like, and then we talked through our goals and kicked off the project. It has been a fabulous working relationship.”

Lori participated every step of the way, including details like what the actual card would look like, what the administrative portal would look like, what each data field would cover, what reporting would look like, and how to categorize all the different items their constituency might need to purchase. “We needed to sort through how to leverage the key fields we were engineering in the system to enter in our consumer information, to create a profile, to create a consumer card account, and then issue the card.” Lori’s team also needed to determine how DOR would load funds onto the card once an account has been created, how to operate reconciliation processes, and how to best run reports. This type of payment card was new to WEX too, so it was a collaborative effort between Lori’s team and the WEX team to ensure that every detail was addressed thoughtfully and thoroughly. “In our conversations with WEX, when we’ve come up with a challenge or an idea, they have always been very helpful to identify solutions. They either know an answer on the spot, or they’ll go away with the question to work through it as a team. And usually by the next week, they’ve already got ideas about what we could do in either a short-term solution or a long-term solution and with the short-term solution the thinking is, let’s see what we can do to expand on it and make it even better as we go forward.”

Building off of existing tools allows speedy development

Lori’s team’s vision for the new CalDOR Payment Card system already aligned with some of WEX’s existing tools. This allowed Lori and her team to accelerate the development process. “Implementing the program happened within a two-year cycle, from starting the contract in December 2021 to rolling it out statewide based on the success of the Napa test pilot with DOR Team Manager/Project Team Member Sean Nunez and his team.”

The cost savings of shifting away from paper checks to virtual cards

One of the advantages of digital payments is the cost savings realized by eliminating paper checks. In the past, DOR was issuing about 15,000 checks a month. “By using the CalDOR Payment Card, it’s freeing up the staff in the time and in the cost of printing the checks, mailing them, stuffing envelopes, and getting them out to the consumers. Not to mention the fact that in the past a lot of checks were stolen from consumers’ mailboxes. The CalDOR Payment Card eliminates all of that from the equation.”

Providing customer service via your payments service provider

One way DOR relies on WEX is providing exceptional and timely customer service to its consumers. As Mindy shares, “We work very closely with the DOR team on providing customer service to their consumers. We either handle their needs directly from our toll-free call center regarding their card account questions, or as needed we direct the call to their DOR Counselor or VR Service Team member for specific VR services questions.” This helps alleviate a lot of the purchasing customer service needs that had once been handled by DOR Counselors and frees up their time for other responsibilities.

How the CalDOR Payment Card has transformed the lives of its consumers

DOR’s consumers can go out and purchase what they need with their new card once the authorized funds are loaded to their account, while controls and data collection give Lori and her team what they need to efficiently and effectively run their CalDOR Payment Card Program. On the back end, basic controls are in place tied to merchant category codes. For example, if DOR has authorized college tuition fees and a consumer is trying to purchase items at a gas station then the card will decline, and the consumer will not be able to make that purchase.

One significant benefit that this card provides is that consumers can now purchase from the most convenient vendor in their local area. In the past there were many barriers for consumers to purchase items needed in a timely manner, including onerous processes for businesses to be able to accept bank draft or “immediate pay” check payments from DOR. Additionally, due to the extensive red tape that is part of the DOR vendorization process, many vendors refused to do business with constituents as a result of all the required paperwork. This limited the number of available businesses from whom consumers could purchase what they needed for their individualized VR employment plan. With the CalDOR Payment Card, that red tape has been eliminated, opening the door for more vendors to service DOR’s customers. As John Sweeney, Director, Business Development at WEX, shared, “DOR’s consumers have hurdles to overcome in their lives and something as simple as paying for goods and services shouldn’t create yet another barrier for them. Our goal with the CalDOR Payment Card was to deliver less complex solutions to their daily purchasing needs, allowing them to feel like any other citizen.”

The card also provides a streamlined and time-efficient process for consumers: “A key challenge facing consumers in the past was that our authorization process took days, weeks, sometimes months. With the card we’re able to authorize and load the funds within the same day or next day for the consumer to use in purchasing the needed items. So, if we have a consumer who on a Friday afternoon says, ‘I’ve got an interview on Monday morning and I need an interview suit,’ we’re able to load the funds onto the card so that the consumer can go out, purchase their interview clothes, and be ready for that job interview on Monday morning.”

How the CalDOR Payment Card changed the lives of DOR’s team

Mindy aptly describes how the CalDOR Payment Card impacts DOR’s team, as she reflects on what she heard from the internal team at DOR. “They found it was very quick for them to sit down, create the participant record, get that card ready to go out, and get funds loaded. It was suddenly a streamlined, easy process and took them a lot less time than their old manual operations processes.” It became much faster to get their customers what they needed, which gave them a greater sense of fulfillment, purpose, and hope in their work.

Training DOR consumers on card use

DOR provides a startup kit to its consumers when they are issued a CalDOR Payment Card. The kit walks consumers through how to use the card and provides a list of ways the card can be used. They are also made aware of roles and responsibilities while using the card, and sign a terms and conditions form during payment card enrollment with their DOR Counselor or VR Services Team Member. By signing this form, the consumers acknowledge that they’re going to use the card for the items and services that have been approved by DOR.

How the CalDOR Payment Card sets the standard for vocational rehabilitation programs nationwide

Since launching the CalDOR Payment Card, word has been spreading nationally and other state vocational rehabilitation programs have been in touch with DOR, hoping to hear how they did it. “This is a trailblazer. We have other state vocational rehabilitation programs that are looking to us to see how this is working. Although other states have tried, we are so happy and proud that we’ve had success building an effective card program for our consumers.”

Creating a “dream come true” through ingenuity and open-mindedness

“I’ve been a strong advocate for this program for many years and for me personally, it’s been a dream come true that DOR’s been able to achieve this goal of having a CalDOR Payment Card not only for our consumers, but also for our department teams.” The collaboration between WEX and DOR gave both teams new opportunities for knowledge expansion and all team members came away with a great sense of satisfaction having developed a new tool perfectly suited for DOR’s needs.

WEX is a leading, global fintech solutions provider, simplifying payments and back-end business processes in the fleet management, benefits management, and corporate and travel payments areas. To learn more, please visit our payments products page. View our case study and our video.

Resources:
State of California