Visa Inc. is expanding its relationship with MoneyGram International Inc. to grab a bigger piece of the remittance market.
U.S. consumers will be able to send funds to Visa cardholders in Mexico through MoneyGram retail locations, the payment card network announced Feb. 2. Visa last year formed a relationship with MoneyGram to support funds transfers to cardholders in Guatemala.
The U.S.-Mexico corridor “is a really important remittance corridor,” Kelly Alpert, Visa senior business leader in charge of money transfer service, said during a Feb. 3 interview. “It’s one of the largest in the world.”
Recipients may receive their funds on their Visa credit, debit or prepaid card. To send funds, a person would need the recipient’s 16-digit card number and the identifying information MoneyGram requires, Alpert said.
Mexico was the third-largest country for remittances in 2010, receiving an estimated $22.6 billion, according to World Bank data Visa cited in its release.
Visa’s relationship with MoneyGram represents part of its efforts to grow its presence in the U.S. funds-transfer market. Last year, the card brand also announced a partnership with Bancomer Transfer Services Inc., a subsidiary of Banco Bilbao Vizcaya Argentaria SA, to enable consumers to send funds from the U.S. to cardholders in several foreign countries.
“Our relationship with Visa and ability to leverage its extensive global network provides MoneyGram with access to Visa accountholders around the world,” Pamela Patsley, MoneyGram chairman and chief executive, said in a Visa press release.
The service has been more widely available outside of the U.S. for several years, as Visa made changes in 2002 to enable its processing network to handle funds transfers to cardholders.
To grow the service domestically, Visa mandated that its U.S. issuing banks be equipped to receive funds transfers for their debit and prepaid cardholders by October 2010. But because of technical requirements, not all of Visa’s U.S. issuers met last October’s deadline. Alpert said.
“We’ve made that a stated requirement in our rules,” Alpert said. “We are currently working with all of the issuers in the U.S. to be compliant with that rule.”
Visa has set an April deadline for issuers to be to receive transfers on a credit card. Issuers are not required to offer cardholders the ability to send funds, Alpert said.
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