Visa Inc. is expected to announce a partnership today with MoneyGram International, a major competitor in money transfer, to drive more volume to its prepaid debit card-reloading network.
The two companies are expected to announce that MoneyGram has agreed to let people use its 40,000 U.S. sites to reload their Visa prepaid debit cards on the San Francisco company's prepaid reloading network, Visa ReadyLink.
The agreement, which is to take effect this summer, quintuples the number of sites where people can use the ReadyLink network. (It now is available in 7-Eleven Inc. stores and grocery stores that offer prepaid cards from Safeway Inc.'s Blackhawk Network unit, among other sites.)
The partnership "gives us a national footprint of locations across the country," Nizam Antoo, Visa's senior business leader for underserved products, said in an interview Monday. "It provides really an excellent value proposition for all the participants."
MoneyGram, which offers its own reloading service for a variety of individual prepaid providers and processors, said the deal will let it reach more prepaid card providers and their customers. Greg Waltz, MoneyGram's vice president and general manager of payment products, said in an interview that he also expects the deal to increase volume — and revenues — for both companies.
"Especially from a Visa perspective, it's difficult to say, 'Go find a participating location.' If you can say, 'Go find a MoneyGram location, any MoneyGram location accepts it,' that helps a great deal," Waltz said. "For us, on the other side of that, it helps to be able to say, reload any Visa ReadyLink-enabled card at any MoneyGram location."
As with its own reloading service, MoneyGram will make money from the fees it charges people to reload their cards; Waltz would not disclose the exact fees it plans to charge but said MoneyGram generally charges $3.95 to $4.95 per reload. Visa, not MoneyGram, will process the reloading transactions — and will potentially benefit from increased transaction volumes as more cardholders reload and reuse their prepaid cards.
Both Visa and MasterCard Inc. have in the past year expanded their own remittance and money transfer operations, which compete with MoneyGram.
Eric Grover, a former Visa executive and the principal of the consulting firm Intrepid Ventures, said Monday that the partnership offers benefits to both companies. Many in MoneyGram's customer base "use prepaid products, which have a lot more utility if you can use them over and over," he said. And for Visa, "They want to move to a point where a reload facility is convenient." Right now, "Visa, it's anywhere you want to be - but the reload network isn't."
The deal to open up MoneyGram reload sites is "incremental, but it certainly helps."