It is not unusual for consumers to call a Univision Communications Inc. television or radio station seeking advice on such matters as where to send their children to school or how to find a good doctor.
So it seems natural that the New York company, which operates the largest Spanish-language television network in the U.S., would explore ways to help ease another common concern in the Hispanic community: how best to manage their money.
In July, Univision introduced a reloadable, general-purpose MasterCard prepaid card, and the company, which recruited an executive from American Express Co. last year, says it is exploring other financial offerings.
Univision says, and analysts agree, that its extensive reach (the company owns and/or operates 63 television and 73 radio stations in the U.S. and Puerto Rico) combined with the high regard for its brand among Hispanics — the fastest-growing segment of the population and one that is largely underbanked — give it a considerable leg up.
Its challenge will be to get its cards into consumers' hands without a physical distribution network. Even prepaid providers that have such networks have struggled to get consumers to keep using their cards once the initial load has been spent.
For banks, Univision's foray into prepaid cards is worth watching — if not as a lesson on how to bring financial products to more Hispanic customers, then for the partnership opportunities it could present.
"The prepaid world in particular is trying to figure out two things: one, what's the best method, channel for reaching consumers and who do they trust the most?" said Jennifer Tescher, the director of the Center for Financial Services Innovation in Chicago. "And I think Univision is going to be able to test out both of those questions."
The decision to get into financial services was spurred in large part by the number of Hispanics who have little if any experience with traditional financial services. About 43% of Hispanic households are either unbanked or underbanked, according to a 2009 study by the Federal Deposit Insurance Corp.
Prepaid cards seemed like a good place to start because they do not require a credit check or a bank account to open, yet can introduce Hispanics to using something other than cash, said Scott Scovel, the vice president of prepaid financial services at Univision.
"This felt like the perfect product at the perfect time for people," he said.
Univision is unique among media conglomerates, analysts said, in that its audience base is homogeneous and extremely loyal. It also has been gaining considerable traction against mainstream networks like CBS, NBC and ABC.
Univision counted nearly four million viewers during the 2008-2009 broadcast season, an increase of 11% from the previous season, according to Nielsen Co. Last month, it was the most-watched television network, broadcast or cable, in English or Spanish, during the coveted 8 p.m. to 11 p.m. prime-time slot among adults 18 to 34 years old, reaching about 1.1 million viewers.
The Census Bureau estimates that more than 45 million Hispanic people live in the U.S. Univision says it reaches about 95% of Hispanic households.
Though the devotion of Univision viewers is harder to measure, there are examples of the brand's power. A survey of Hispanic voters in 2003 found that Univision was seen in a more positive light than the Catholic Church, for instance. And Univision has been a big driver behind the "Ya Es Hora" campaign that since 2007 has helped motivate 1.4 million immigrants to apply for citizenship.
"We're much more than just a media company," said Scovel, who was vice president of global product management and business development for the prepaid division at American Express before he came to Univision in May 2009. "Univision is viewed as part of the family, as a trusted member, so, for us, getting into financial services made a great deal of sense."
Analysts said Univision's potential for success is high because it has a trusted brand and a ready-made audience with an unmet need.
"Univision is probably one of the most trusted brands in the Latino market," said Srini Venkateswaran, a partner in the financial institutions group at the consulting firm A.T. Kearney and a former cards executive at Citigroup Inc. "They have the one most important requirement for any financial services transaction, which is the trust factor."
And that's something that traditional banks have little of these days.
"Cracking the code on marketing to Hispanics has been difficult for traditional banks," said John Grund, a partner at First Annapolis Consulting in Linthicum, Md. "They are not trusted."
But Univision's brand and its access to a large group of people can get the company only so far.
"It's a great first step," Venkateswaran said. "What they don't have is a retail presence."
That is where partnerships can come into play, he said. Big banks in particular might be interested in working with Univision, Venkateswaran said, helping to bring its customer base a fuller suite of products and, in turn, tapping into the Hispanic market.
"I think Univision is probably a great channel, no pun intended, to get to the underbanked Hispanic population," he said.
Scovel said his company is open to partnerships "that will enhance the customer experience."
Univision counts several large financial services companies among its advertisers, including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and PNC Financial Services Group Inc.
JPMorgan Chase, for instance, ran commercials on Univision's networks during the World Cup soccer tournament, to let customers know it was beginning to offer bank statements in Spanish.
Univision has been promoting its prepaid cards on its television networks and radio stations, as well as on its website. It would not disclose how many people have applied for cards or how many are active.
Bancorp Bank, a $2 billion-asset subsidiary of Bancorp Inc. in Wilmington, Del., is issuing the prepaid cards for Univision. The cards, which can be ordered online or over the phone, use MasterCard's network. Customers can load and reload their prepaid cards, free of charge, at tens of thousands of sites, Univision said, including Western Union and MoneyGram stores as well as places that offer the Green Dot prepaid card. The minimum load requirement is $20.
Consumers can also elect to have their paychecks directly deposited to the card. To encourage people to choose this option, Univision offers a $10 bonus after the first check is deposited.
Univision charges a $9.95 monthly maintenance fee per account (up to three cards can be on one account). Additional fees include $1 for bill payments, $1.95 for ATM withdrawals (in addition to whatever the ATM owner may charge), 2% for currency conversions and $1 for paper statements.
John Ulzheimer, the director of consumer education at the lead-generation firm Credit.com, said the fees appear to be at the high end of the prepaid spectrum but are not egregious.
Still, he pointed out, the card essentially has a $120 annual fee, which is more than a lot of credit cards charge.
Univision should tread carefully, he said, to ensure it does not disenchant people with the financial services offering, which could harm its brand.
"You have a company that clearly resonates with the Hispanic community and can help improve the access of that community to mainstream financial services," he said. "They should take very cautious steps that this … does not cost them brand revenue."