MasterCard Inc., Banco PanAmericano SA and Rev Worldwide have unveiled a prepaid card in Brazil, where more than half of the country's employed residents are paid in cash.
There are at least 75 million unbanked consumers in Brazil that the companies hope to reach with the prepaid product. The card was launched April 29.
About 40% of Brazilians do not use or have access to basic banking services, while 55% of employees in Brazil are paid in cash, Caio Costa, Banco PanAmericano product manager, said in an interview. "We are giving them a day-by-day card that is also a cheap product for them to put their money into," Costa said.
Julie Conroy McNelley, a senior risk and fraud analyst at Aite Group LLC of Boston, said, "the underbanked population is a hugely attractive market, so financial institutions are trying to figure out ways to tackle that community."
Many unbanked consumers will use the prepaid card, but some consumers may avoid it because of a "distrust of banking institutions and a reluctance to have their purchases tracked," McNelley said.
Subsequently the card may provide utility for a portion of the population, but the bank may face challenges persuading some consumers to embrace it, she said.
Rev Worldwide, an Austin, Texas, prepaid card and mobile payments company, will provide the platform for the MasterCard-branded card. Brazilians over 18 who have a valid Brazilian revenue agency number and government-issued photo identification card may purchase the PanAmericano MasterCard Prepaid Card from participating PanAmericano stores for $3 for the next 60 days. Thereafter, consumers may purchase the card for $6, Costa said.
Cardholders also pay a fee of just over $1 each time they reload the card account and about $2 per ATM cash withdrawal, he said. Depending on the automated teller machine, consumers may withdraw up to $619 at one time.
The card also has no minimum reload limit; the maximum reload limit is $1,858, Costa said.
The card touts no spending limit other than the available balance and enables cardholders to make purchases online and anywhere in Brazil or abroad where MasterCard is accepted.
Cardholders also may transfer funds between card accounts, check their balances and confirm transactions either online or from their mobile phones.
Cardholders may reload the card account at any location in Brazil accepting Boleto Bancario deposits, and they eventually may reload their accounts at any of the 20,000 bank, lottery and other correspondent locations in the Caixa Economica Federal network.
Caixa Economica Federal is a Brazilian bank and one of the largest government-owned financial institutions in Latin America.
