MasterCard Inc. is aiming to drive more prepaid card transactions over its payment network through a deal with Wal-Mart Stores Inc.
The Purchase, N.Y., company said Wednesday that it helped develop two new reloadable prepaid card products that are being sold in Wal-Mart's 3,500 U.S. stores. The cards are part of Wal-Mart's existing MoneyCard program, which is managed by prepaid card marketer Green Dot Corp. and issued by General Electric Co.'s GE Money Bank.
"The programs are based on consumer insights and targeting that we actually brought proactively to Wal-Mart," Ajay Banga, MasterCard's president and chief executive, said on an earnings conference call.
With the Wal-Mart MoneyCard Family edition, customers can receive a second card for free that is linked to the same account. MasterCard's brand is also on the Wal-Mart MoneyCard EasyPay, which more prominently markets the ability to pay bills.
"These cards have a distinct packaging and look from the previous offering," a spokesman for MasterCard wrote in an email on Wednesday, adding that the distinction is "made between the various card types in an effort to create greater consumer awareness and understanding of the benefits of prepaid products."
The program could be a boon to Green Dot, which derives a major portion of its business from the Wal-Mart program, said Andrew Jeffrey, an analyst with SunTrust Robinson Humphrey.
Revenue from products sold at Wal-Mart represented about 58% of its total operating revenue in the first quarter, the most recent figure available, according to a Green Dot regulatory filing.
While the new versions of the MoneyCard carry the same features as the existing Visa-branded version, their different marketing helps to highlight the cards' features to consumers, Steve Streit, the chairman, CEO and president of the Monrovia, Calif., company said in an interview on Wednesday.
"The reason we do these kinds of line extensions is frankly similar to the same reason why a Kellogg or any kind of a consumer brand does it," Streit said. "That is, it increases the opportunity to target different segments within a customer base."
In addition to the MasterCard-branded versions, Wal-Mart also introduced a new gold version of the MoneyCard carrying Visa's brand that has "a different look" from the existing version, Streit said.
Wal-Mart began selling the new cards in late April or early May, he added.
