MasterCard Worldwide and Western Union Co. are expanding a program that enables consumers to send funds via prepaid cards, the companies announced Nov. 29.
Now consumers who go to Western Union locations globally to receive wire transfers can have the funds loaded into accounts accessible with prepaid MasterCards instead of receiving cash.
These services already have been available in the United States, but now MasterCard and Western Union are expanding it around the world. Storm Lake, Iowa-based MetaBank issues the card.
The goal is to provide “seamless, safe and efficient” funds-transfer services, Ron Hynes, MasterCard head of prepaid solutions, said in a Nov. 29 interview.
The partnership will help MasterCard expand its reach to consumers who do not have or do not regularly use bank accounts or traditional credit or debit cards. Some banks offer prepaid cards and funds transfers to their customers, but those services still largely are the domain of nonbank companies, including Western Union, that focus on low-income and other “underbanked” consumers.
The program could be attractive to 2.5 billion “financially underserved” adults around the world, Hynes says.
Three-quarters of the prepaid market is in the United States, but MasterCard is hoping for “tremendous growth” in the market abroad, Hynes says. He estimates more than half the prepaid business will be outside of the U.S. by 2017, when the prepaid market will reach $840 million in consumer spending.
MasterCard and Western Union expect to launch new initiatives in Latin America and Europe in coming months, though executives declined to go into detail. They say their partnership does not exclude the companies from doing business with competitors, including MasterCard rival Visa Inc. or Western Union rival MoneyGram International.
But Western Union, which has offered Visa products in the past, now says its preference is with MasterCard.
“You’re going to see MasterCard as the predominant brand we will utilize,” Mike Hafer, vice president of global cards at Englewood, Colo.-based Western Union, said in the interview.
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