Western Union Holdings Inc. may expand a prepaid remittance card program to most Central American countries if its June 4 product launch in El Salvador goes well.
Through Western Union’s Central American agent AirPak Financial Corp., customers in El Salvador now may put all or part of their received remittances in a MasterCard-branded prepaid debit card account for use online or anywhere MasterCard is accepted, according to a press release.
AirPak is licensed by MasterCard to issue the cards, and Credencial Argentina is processing the card transactions.
The launch is limited to 20 stores and will expand to AirPak’s 491 locations throughout the country once any kinks are smoothed over, Michael Hafer, Western Union senior vice president of global prepaid, tells PaymentsSource.
The program will help unbanked consumers store funds and use the value virtually anywhere payment cards are accepted. El Salvador received $3.6 billion in remittances in 2010, and just 47% of adults in the country have bank accounts, the release noted, citing a 2010 World Bank report.
Western Union also has a presence with AirPak in Nicaragua, Honduras, Costa Rica and Guatemala, and they could be the next markets for the prepaid program, Hafer says.
“Depending on consumer feedback, we will work with AirPak to determine a go-to- market strategy for the remainder of this year and going into next year,” Hafer says.
When remitting funds, a friend or relative initiates the transfer using a Western Union partner location or by phone or online. In person, a sender completes a Send Money form and hands it to a Western Union associate along with cash or a debit card for the amount to send, and saves the tracking number to share with the recipient.
By phone, the sender calls a toll-free number and gives an associate the desired amount to send with a credit or debit card and saves the tracking number to share with the recipient. Online, the sender registers or logs on at the Western Union website, selects the “Money In Minutes” service, enters the recipient’s name, city and phone number, pays the desired amount with a credit or debit card, and saves the tracking number to share with the recipient.
The recipient would enter an AirPak location to receive the funds through the tracking number and sign up for a card. He also may choose the amount loaded into the card account and how much to receive as cash.
Card loads cost $1 each. Withdrawals from the card account cost $1 at an AirPak location and $2 at any Cirrus ATM. MasterCard owns the Cirrus ATM network.
The launch represents another step toward including financially underserved consumers in global commerce, Deborah Baxley, principal at Capgemini Financial Services, tells PaymentsSource.
“As we've seen in other markets, any opportunity to eliminate cash reduces crime and improves convenience and, as a bonus, the caché of a branded card is a powerful draw for customers,” Baxley says.
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