Visa Reload Network Expands

  Visa USA's ReadyLink prepaid card reload network is poised for growth. The network recently added a major new convenience and gas retailer supporting reloading locations and 20 new issuers and other partners who will issue and process Visa-branded prepaid cards.
  Visa says the reload network and its prepaid cards target the 80 million consumers who move into and out of the banking system but who earn a combined $1 trillion in income each year and rely heavily on cash for everyday transactions. All reloadable Visa-branded prepaid cards can use the Visa ReadyLink network, including Visa-branded payroll cards.
  The card network would not say how many Visa prepaid cards have been issued thus far that could take advantage of the ReadyLink program, which launched in December. But it says the bellwether for the program is that more merchants, issuers, acquirers and other partners are joining the effort.
  "In the next three to six months we plan to announce additional participants in the program," says Nizam Antoo, Visa vice president of prepaid products. "Our vision is to build out a national footprint so cardholders across the U.S. have access that is convenient, secure and safe."
  Visa does not make money off of the card reloads, a Visa spokesperson says. Though Visa would not discuss specific pricing, the spokesperson say the issuer pays the acquirer for the reload, and the acquirer sets the fees.
  In one of Visa's latest deals, customers of 7-Eleven convenience stores will be able to add value to Visa-branded prepaid cards at more than 5,350 store locations later this year. Previously, ReadyLink had 1,550 reload locations through a deal with the Blackhawk Network subsidiary of the Safeway supermarket chain.
  Antoo says he sees such retail locations as supermarkets, convenience stores, drug stores and discount retailers as future participants in the ReadyLink network.
  Visa says its list of new issuers, partners, processors and acquiring financial institutions will rapidly expand the network. New participants include issuers BankFirst, U.S. Bancorp and Bank of America; partners FSV Payment Systems and Money Network; processors Galileo, Alliance Data and eFunds; and acquirers Fifth Third Bank and Fiserv, among others.
  One aspect that is attracting financial players to the program is that the value loaded onto the cards is moved immediately to the card's account from the reload terminal, says Antoo. There is no delay for the banks to get the funds, which reduces credit risk for the issuing bank.
  Consumers can get the prepaid Visa cards from a retailer, through their employer or from a state or federal agency. Visa prepaid card issuers promote the reload network using statement inserts and through cell-phone text or e-mail messages. Issuing banks may get that information when the consumers sign up for the card.
  MasterCard also runs a reloading network for its prepaid cards, which also target the unbanked. The rePower Load Network allows MasterCard and Maestro prepaid cardholders to reload cards through a deal with InComm, a prepaid product and point-of-sale technology provider. InComm plans to offer the solution to the 145,000 stores in its retail distribution network.
  Another burgeoning reloadable prepaid card program is the Green Dot Network, operated by the Green Dot Corp. based in Los Angeles. It has 109 prepaid card programs reloading on its network, including those involving MasterCard, Visa and Discover cards. There are more than 40,000 reload locations in the U.S. at such retailers as Walgreens and Rite Aid.
  Tim Sloane, director of the debit practice at Waltham, Mass.-based Mercator Advisory Group, says reloading is the key to serving the unbanked. "There's a real need for reloading for prepaid cards so they can become more cost effective and efficient," he says. "Reloading extends the life of the card. So if you're going to to suggest that individuals use these cards as part of their aspiration to have a relationship with a financial institution, the networks need to make it easy for consumers to do so."
  (c) 2007 Cards&Payments and SourceMedia, Inc. All Rights Reserved.
  http://www.cardforum.com http://www.sourcemedia.com