Seeking to provide a means for underserved Hispanics to take a safer first step into financial services, a Des Moines, Iowa-based consulting firm is marketing a Visa-branded prepaid card designed specifically for Latin Americans.
Coopera Consulting, which helps credit unions focus on emerging markets, will market the Coopera cards to Hispanics who are members of credit unions in Iowa and other states that will issue the cards, Coopera announced Oct. 12. Des Moines-based The Members Group will process the card transactions, and FIS, or Fidelity National Information Services, based in Jacksonville, Fla., will provide back-end payment technology.
Coopera believes issuing cards through credit unions will make Hispanic consumers feel more comfortable than by making them available through a large bank, Miriam De Dios, vice president of Coopera, tells PaymentsSource.
“The credit union is a good place for an introductory product like this in a community,” De Dios says.
Seven credit unions in Iowa, Texas and North Carolina will begin issuing the card by early December, De Dios says.
The card would be available to any consumer, but it was created for the Hispanic market based on demographics, with the registration process, fees and bilingual marketing and call-center support service tailored to Hispanic consumers, De Dios says.
Consumers may start using the prepaid card issued by a participating credit union and then move on to more traditional financial services, De Dios contends.
The Coopera card represents an easy first step in using a financial service because information from other established savings or checking accounts is not needed, and signing up for the card does not call for numerous pieces of identification, De Dios says.
The primary cardholder can obtain up to six secondary cards, at $10 each, to distribute to other family members or to relatives in other countries, making the funds placed in the prepaid account available to others, De Dios says.
Cardholders may load funds into their account through payroll direct deposit, online or by visiting a credit union branch or any of more than 40,000 stores participating in the Visa ReadyLink reload program.
The cards will carry a monthly maintenance fee of $5.95, but cardholders will pay no fees to load their card accounts or to receive free text message alerts about the account, De Dios says. Other fees include $1 ($2 if international) per ATM withdrawal, $1 for access to a paper statement, and a 1% foreign exchange processing fee if transactions take place outside of the United States, she adds.
Because one in every two Hispanics is unbanked or underserved financially, De Dios says it is not surprising that card brands target Latin American segments with prepaid marketing (
“If the Hispanic population is more comfortable dealing with cash because they know how much they have [to pay for purchases], then we are trying to transfer that behavior to the Coopera card,” De Dios says.
One industry analyst agrees it is wise to establish prepaid products tailored to Hispanics but is not convinced credit unions have an advantage over traditional banks.
“There are many large banks close to the Hispanic market,” Brian Riley, senior research director and analyst with Needham, Mass.-based TowerGroup, tells PaymentsSource. “Prepaid for the Hispanic population is a huge market and an exciting channel, but you have to be able to deal with the different facets of it, like providing call centers.”
Card brands seeking inroads into the large Hispanic market have deployed different strategies for appealing to that market (
Financial institutions can emphasize the many benefits of a prepaid card by promoting it as a service to the unbanked, as an easy tool to transfer funds, or as a way to start a wealth-management program, Riley says.
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