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A recent agreement between MasterCard Worldwide and Univision Communications Inc., the nation's largest Spanish-language media company, potentially could change the way promoters market prepaid services to Hispanics in the United States, according to one industry observer.
The two companies last week announced a strategic partnership that involves cobranded gift and general-purpose prepaid cards scheduled for rollouts sometime in 2010. The Bancorp Bank is issuing the cards.
Univision's large media network, which includes local television and radio stations in 50 cities with large Hispanic populations, will help MasterCard to promote the advantages of prepaid services to a large segment of a financially underserved population, says Rachel Schneider, a director at the Center for Financial Services Innovation, a Chicago-based organization whose role is to bring banking services to the unbanked and underbanked.
MasterCard marketers have "a platform [in Univision] that enables them to market the cards in an entirely new way," Schneiders says. Besides television and radio commercials, Univision sponsors live events such as concerts and festivals during which MasterCard also could have a presence and market the cards, Schneider adds.
Ted Zagat, Univision senior vice president of franchise development and strategic partnerships, agrees. Univision's media properties give the company "a significant opportunity to leverage these products to inform and educate the U.S. Hispanic community about the financial tools that are available to them," according to Zagat. Univision initially plans to market the cards to Hispanic consumers lacking traditional banking relationships, he says.
Univision's brand awareness with the U.S. Hispanic population is the primary reason MasterCard partnered with the media giant, Laura Kelly, MasterCard senior vice president of global prepaid solutions, tells ATM&Debit News. "Based upon Univision's mission to empower, inform and entertain the Hispanic community, they recognize, better than anyone, the importance of empowering Hispanics in their daily lives," Kelly says.
The MasterCard agreement "is an attempt to enhance their brand and use their brand to bring new products and services into the Latino market," Schneider says.
This Univision agreement comes on the heels of MasterCard's May announcement that it would target its prepaid products to U.S. Hispanics with an advertising campaign that includes a television commercial intended to persuade consumers to switch to using reloadable prepaid debit cards instead of cash.
The commercial, which is part of MasterCard's "Priceless" ad campaign, will run for the rest of this year in nearly a dozen U.S. markets that have high concentrations of Hispanic consumers, including Chicago, Los Angeles and New York.
Advertising efforts also include national Spanish-language radio and online advertisements.
Marketing prepaid services to Hispanics is not new, but few companies have had success doing so, Schneider says.
"The difference here is the scale," she says. "MasterCard has the 'Everyday Prepaid' campaign primarily targeted at Latinos, and that changes the game."
Other prepaid card providers also could get a piece of potential revenue as industry statistics suggest the growing U.S. Hispanic population represents a prime opportunity.
Hispanics represent 19% of the 40 million U.S. households classified as financially underserved, the results of a July study by the Center for Financial Services Innovation suggest. Overall, 35.4% of Hispanic-Americans are unbanked compared with 31.6% of African-Americans, according to the study.
The study reveals "Latino consumers are more likely to be unbanked versus underbanked, especially those born outside the U.S." But a large percentage (69.8%) of U.S.-born Latinos are unbanked compared with 80.3% of foreign-born Latinos, the study data show.
MasterCard's and Univision's marketing efforts most likely will cater to these different segments within the U.S. Hispanic population, Schneider says. "Companies that are successful in meeting the needs of Latinos segment the market and understand the differences between the consumer who has been here for a while versus those who are recent immigrants to the country," she says. ATM
