RegaloCard, a fledging mobile-payments company that soon plans a nationwide rollout in the United States, has changed how consumers send funds transfers using its free product.
Under the new system, senders purchase a merchant’s prepaid card and scratch off an area on the back of it to reveal a PIN. The buyer then calls a toll-free number and enters the PIN and the recipient’s mobile number. The recipient receives an instant text message that contains a redemption PIN to use to access and use the funds at the specified retailer.
The recipient receives a text message instantly that contains a redemption PIN so he can use the funds at a participating retailer. To complete a transaction, the cashier enters the recipient’s mobile-phone number into a dedicated terminal. The recipient then enters the PIN to access the funds. That process remains unchanged.
The previous system required senders to purchase a prepaid gift card in the United States for a specific retailer in Central America. When the consumer bought the card, he told the cashier the recipient’s name and cell-phone number, which the cashier entered into RegaloCard’s back-end system using software integrated into the point-of-sale system. The cashier then gave the sender a “unique code” that served as a tracking number for the transaction.
RegaloCard believes the new method will help the company attract more interest in the service, according to Gregory Keough, chairman and CEO of the Miami-based company. The system works with any cellular carrier and phone.
The company’s distribution network is scattered across the United States, but consumers may purchase cards at locations that also sell prepaid phone cards, such as convenience stores in parts of New York, California and Nevada. RegaloCard plans to announce additional distributors in the next couple of weeks, Keough says.
During a seven-month trial that began last summer, consumers suggested the new system to RegaloCard. It was a process the company had on the backburner because it resembled the way consumers bought prepaid calling cards, Keough says.
“We wanted to stay as close as possible to normal consumer behavior,” he adds.
RegaloCard continues to grow its retail network in Central America. At least eight retailers accept RegaloCard in El Salvador. In Guatemala, department store chain Cemaco also accepts RegaloCard payments. The chain has 10 locations that sell household goods, such as furniture and kitchen appliances.
Locations in El Salvador include Burger King and Chili’s Bar & Grill.
Keough believes RegaloCard has created a market for a funds-transfer option that previously was unavailable. The company has dubbed it the “micro-money transfer.” Consumers can send as little as $10, but RegaloCard may reduce the amount to $5. RegaloCard receives a percentage of the funds loaded into the card accounts from each participating retailer.
“We’re fundamentally changing a very large business in money transfers, but at the end of the day our business concept is simple and easy to understand,” Keough told PaymentsSource in January.
