Debit card fight hurts social progress startups

My favorite quality of our city’s tech ecosystem is that its people see themselves as New Yorkers first, and tech workers second. It’s why so many startup founders here make solving complex social challenges core to their business — they want to make the city a better place.

Propel, for instance, made a name for itself with a streamlined app that saves time and money for people accessing SNAP benefits. Dollaride has launched clean mobility options for communities underserved by public transit. Guava offers digital community banking for Black-owned small businesses. These and many other homegrown companies have helped establish New York as a proving ground for startups pursuing business success and social progress simultaneously.

At the same time, companies that make social issues core to their business operations run the risk of wading into hyper-politicized debates, which, as we’re seeing unfold in New York right now, can stand in the way of progress.

Never heard of those companies? How about MoCaFi, the New York-based financial technology company serving unbanked and underbanked communities founded by CEO Wole Coaxum?

MoCaFi was chosen by the Adams administration for a pilot program to give prepaid debit cards to migrant families for purchasing groceries, baby supplies, and other essentials from local bodegas and supermarkets — a contract that has received fierce criticism, especially from conservatives.

The influx of migrants to New York since late 2022 has become a lightning rod for our elected officials and the communities around the city that have made room for more than 180,000 asylum seekers. The debate over how to respond (and who should pay for the response) rages on more than a year after the first bus of migrants arrived.

But looking at the issue from a non-political lens makes it easy to see the bottom line: both the migrants and the communities that have welcomed them need immediate financial support.

And it’s just as easy to see that the city’s partnership with MoCaFi is a worthwhile attempt to connect migrants with desperately needed money while creating scores of new customers for struggling bodegas and grocery stores around the city.

The partnership is a perfect example of how tech can streamline government services, save taxpayer money, and connect people with the support they need. It’s not going to solve this crisis, but it could give asylum seekers some firmer footing to take their first step toward a new life, one that will contribute to the growth of our city as a whole.

Unfortunately, the deep politicization of the migrant issue has cast a dark shadow over this innovative partnership. Texas Gov. Greg Abbott, who has sent busloads of migrants to New York City, called the plan “insanity,” “reprehensible,” and “offensive.” Other critics have been more specific, saying this program is draining taxpayer money.

This argument doesn’t hold up under a closer look. In fact, this program is estimated to save the city $600,000 per month and $7.2 million annually compared with the original migrant food delivery program, in which many meals were wasted.

Critics have also looked past MoCaFi’s strong track record of delivering results for the municipalities it works with. The company’s Angeleno Connect program in Los Angeles, launched in 2020, has successfully reduced government costs of providing resources to unbanked and underbanked people in the city. And in Birmingham, Ala., MoCaFi has helped deliver more than $20 million in emergency assistance to thousands of families

MoCaFi’s partnership with the city is a pilot, and will only service about 115 families to start. If, at the end of the six-week pilot period, the partnership hasn’t had a significant positive impact for these families, the city can move on and search for other solutions.

Whether the program is successful or not, it is imperative that the city be able to safely test out bold ideas like this, especially when they attempt to address a crisis the likes of which we’ve never seen before. In the private sector, the most successful companies take big swings in testing new ideas or products without fear of failure. Our government should be able to do the same.

New York has stared down many crises before, and we’re at our best when we view these challenges as opportunities to become a better city. But we can only seize these opportunities if our leaders — both in government and private industry — have the courage to step up and try something new and different to support communities in need.

We’re lucky that New York’s tech community has so many people who want to drive this change, but we still have to give them a chance.

Samuels is the president and CEO of Tech:NYC. 

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