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Western Union Co. is adding reload capability to its popular Visa-branded Gold prepaid card.
This is the third Visa-branded reloadable prepaid card Englewood, Colo.-based Western Union either is offering or is planning to offer.
The company strategy is to increase its presence in the prepaid market as more consumers find it convenient to have a card to pay bills, Stewart Stockdale, executive vice president and president of Western Union's Americas region, tells ATM&Debit News.
"Reloadable prepaid cards are a natural extension of our money-transfer business," Stockdale says. "We see the card as a way to increase customer loyalty. We want to develop a broader relationship with the occasional user of our money-transfer services."
With the Gold card, cardholders' ability to reload funds is an enhancement of Western Union's existing Gold card, which has 8 million cardholders nationwide, Stockdale says, noting Western Union has been testing the reload capabilities at several U.S. locations.
The Gold card program enables cardholders to send and receive funds and earn reward points, which cardholders can use to reduce funds-transfer fees.
Meta Financial Solutions, a holding company of MetaBank and Meta Financial Solutions, issues the card.
Western Union will begin converting existing Gold cardholders to the enhanced Visa-branded prepaid card this month. The other cards also are Visa branded. Cardholders will be able to pay for purchases using the cards at retail stores and over the Internet.
In addition, cardholders will be able to reload the cards at more than 50,000 Western Union locations, Stockdale says.
The Gold card is Western Union's third prepaid card. The company also plans to offer the MoneyWise prepaid card at undisclosed future date. Western Union also offers the Western Union prepaid card, Stockdale says.
Western Union is testing the MoneyWise card, a reloadable, Visa-branded prepaid card in St. Louis and Kansas City, Mo., according to Dan Diaz, a spokesperson for Western Union Financial Services. With MoneyWise, the cardholder sends the card that accesses a preloaded account to the recipient via overnight delivery. Once the recipient has the card, he can activate it using a Western Union money-transfer code number provided by the sender.
Western Union sells its other prepaid card on J-hooks in retail stores in the U.S. and Canada, Stockdale says. Bancorp Bank of Wilmington, Del., issues this card.
With the cards, Western Union hopes to catch a payments wave Mercator Advisory Group recently detailed in its 36-page report "The Resilient Nature of Prepaid: A Bright Spot in a Down Economy." Maynard, Mass.-based Mercator names "open money/financial services cards" as a growing segment within the prepaid card industry despite declines in the gross domestic product.
"Despite the gloomy GDP data, transaction volume is actually up slightly for debit transactions, which includes signature, PIN and prepaid products, while credit card volume is basically flat," Mercator says.
Moreover, by offering reloadable, network-branded prepaid cards, Western Union is following a trail blazed by tax-preparation companies H&R Block Inc. and Liberty Tax Service, which offer similar cards to clients to establish long-term relationships, says Adil Moussa, an analyst with Aite Group LLC in Boston (ADN, 1/22).
H&R Block Bank of Kansas City, Mo., issues the Emerald MasterCard, a reloadable prepaid card, and Inter National Bank in McAllen, Texas, issues the Visa-branded All Access Liberty Prepaid Card.
With funds-transfer services, clients may use the service more frequently than tax preparers' cards—perhaps once a month—but the goal is the same: keeping long-term customers, Moussa says.
Visa Inc. and MasterCard Worldwide strongly support companies offering prepaid cards to customers because each "transaction on their networks means more money for them," says Moussa, noting that the networks charge an assessment fee of 0.09% per transaction. In addition, the networks charge indirect fees to merchant acquirers for services such as address checks, he says. ATM
