Hoping to reach out to Brazil’s 75 million unbanked consumers, Banco PanAmericano SA, MasterCard Worldwide and Rev Worldwide have launched the country’s first reloadable prepaid card for everyday purchases, the Brazil-based bank announced April 29.
Rev Worldwide, an Austin, Texas-based prepaid card and mobile-payments provider, will provide the platform for the MasterCard branded card.
About 40% of Brazilians do not use or have access to basic banking services, while 55% of employees in Brazil are paid in cash, Caio Costa, Banco PanAmericano product manager, tells PaymentSource. “So we are giving them a day-by-day card that is also a cheap product for them to put their money into,” Costa adds.
Brazilian consumers older than 18 who have a valid Brazilian revenue agency number and government-issued photo identification card may purchase the PanAmericano MasterCard Prepaid Card from participating PanAmericano stores for BR$5 (US$3 or 2 euros) for the next 60 days. Thereafter, consumers may purchase the card for BR$10, Costa says.
Cardholders also pay a BR$2 fee each time they reload the card account and BR$3.50 per ATM cash withdrawal, he says. Depending on the ATM, consumers may withdraw up to BR$1,000 at one time.
The card also has no minimum reload limit; the maximum reload limit is BR$3,000, Costa says.
The card touts no spending limit other than the available balance and enables cardholders to make purchases online and anywhere in Brazil or abroad where MasterCard is accepted. Cardholders also may transfer funds between card accounts, check their balances, and confirm transactions either online or from their mobile phones.
Cardholders may reload the card account at any location in Brazil accepting Boleto Bancario deposits, and they eventually may reload their accounts at any of the 20,000 bank, lottery and other correspondent locations in the Caixa Econômica Federal network.
Caixa Econômica Federal is a Brazilian bank and one of the largest government-owned financial institutions in Latin America.
“The underbanked population is a hugely attractive market, so financial institutions are trying to figure out ways to tackle that community,” says Julie Conroy McNelley, a senior risk and fraud analyst at Boston-based Aite Group LLC.
Many unbanked consumers will use the prepaid card, but some consumers may avoid it because of a “distrust of banking institutions and a reluctance to have their purchases tracked,” McNelley says.
Subsequently the card may provide utility for a portion of the population, but the bank may face challenges convincing some consumers to embrace it, she contends.
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