Western Union Co., in a bid to leverage its core business outside the U.S., is poised to launch and expand its reloadable prepaid debit card product in markets where consumers typically send and receive multiple funds transfers throughout the year.
The Englewood, Colo.-based company is preparing to roll out its prepaid card in Austria, Germany, Jamaica, Mexico, Nicaragua, the Philippines and the United Kingdom by the end of the year, PaymentsSource has learned. Western Union first announced its plans to expand prepaid internationally earlier this year.
Western Union plans first to target consumers enrolled in its loyalty program to make them aware of the cards, according to Greg Schneider, the company’s senior vice president of prepaid. The company also will use its agent network and retail and bank partners in those countries to sell and reload the card.
“We looked at our senders and we looked at those [consumers] who received transfers and targeted them [for the card first],” Schneider says. “If someone has received four to six money transfers in the last year, they are probably a good candidate for our product.”
Some of Western Union’s target countries are among those highlighted in a recent Mercator Advisory Group about which countries hold the greatest potential for market opportunities for prepaid products and services.
Austria, Germany and the United Kingdom combined represent some $192.4 billion in potential prepaid opportunities as of 2009, the report says. Remittance and open-loop cards were segments included in those opportunities.
“[Western Union] has a huge opportunity internationally,” Tim Sloane, director of the prepaid practice for Mercator, tells PaymentsSource. “They have the infrastructure already in place in those countries to sell prepaid.”
Europe particularly has a robust card market, though Western Union will face some competition in certain countries, Sloane notes.
Western Union does not expect much competition in countries such as Nicaragua and the Philippines where prepaid card penetration is low, Schneider notes.
Western Union is working with Visa Inc. and MasterCard Worldwide to educate consumers in those countries about prepaid’s advantages over carrying cash, he adds.
“Customers are very excited about the product [in the Philippines] because cash poses certain problems,” Schneider says. “Consumers tend to go through cash quickly and safety becomes an issue when you’re carrying around cash after receiving a transfer.”
Western Union plans to add a bill-payment feature to its cards in the Philippines, Schneider adds.
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