A growing number of prepaid players are discovering that joining
forces with each other is helping them to reach out to prepaid
consumer markets with greater speed and better results. Migrant
remittance solutions are playing a major role in driving adoption
in the unbanked market, as Charles Davis

Enid, Oklahoma, is an unlikely spot for a prepaid card aimed at
Brazilian expatriates – or so you might think. Spend a few minutes
with Central National Bank’s Tania Warnock, however, and you soon
learn that the little bank ($500 million in deposits) is a
veritable United Nations when it comes to prepaid cards.

Spurred by an influx of Mexican immigrants, Central National
teamed with a local business in need of a better solution for its
payroll needs, and one thing led to another, said Warnock, head of
marketing for the cards unit of Central National.

“We began with a Mexican prepaid product with an inexpensive
remittance feature and Spanish-language support,” she told
CI. “Now we have automated customer service interfaces in
Portuguese and Creole as well, because we have prepaid offerings
for Haitians and now Brazilians.”

Having established a name for itself in Latin America, Warnock
said that banks throughout the region are reaching out.

Targeting the Brazilian migrant market

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The latest call came from a start-up based in Pompano Beach,
Florida, called Tal Cash, which is owned by Gestão Tecnologia and
Banco Rendimento, two Brazilian companies, and a few months later,
Tal Card was born.

Central National Bank issues the reloadable prepaid debit card
and remittance product aimed at Brazilian immigrants. Tal Card
customers can send money to Brazil and 11 other Latin American
countries for $6.

The cards are sold through agents such as Brazil Box Courier,
which has offices in New Jersey, Massachusetts, Florida,
California, and Georgia. A PIN-only card is instantly issued, and a
personalised MasterCard is provided later. The Tal Card can be
reloaded by automated clearing house direct deposit, through Green
Dot’s network, and at certain banks. The bank offers cards to US
immigrants in stores in predominately Brazilian neighbourhoods on
the East Coast of the United States, Warnock said.

Central National already has a deal with Bancomer, a Mexican
bank, to provide funds-transfer services to 12,000 locations
throughout Latin America, including Brazil. Banco Rendimento has
500 cash pick-up locations but plans to have funds recipients
deposit money directly into bank accounts. Tal also has an
agreement with BR Courier, a Brazilian moving company with offices
throughout the United States that helps immigrants send goods home
to Brazil, to sell the Tal Card through BR’s roughly 200 agents.
Consumers buy the card for $19.95 at a store and get an
instant-issue card for immediate use, and Central National sends
the consumer a personalised MasterCard later, Warnock said.

Cardholders can then send funds to recipients in Brazil using a
website or telephone system. Recipients can pick up the funds at
one of the 12,000 participating bank branches or stores in Latin
America, Warnock said, adding that there is no charge for receipt
of funds.

All of Central Nation’s prepaid cards have a built-in remittance
capability, meaning that someone in the US can set up a remittance
plan easily and quickly and pay just $6 to send up to $1,000 a day
– a strong selling point given the fact that fees for remittances
now average $15 to send $300 to Latin America.

“If you wire money through a bank, you could pay $40 or more,”
Warnock said. “Ironically enough, if we have a regular bank
customer wire money it costs far more than with one of our prepaid

In Haiti, Central National developed a prepaid card on behalf of
a US employer with a Haitian employee base with no way to
inexpensively send money home. Central National teamed with
Fonkoze, a world-renowned microlender, to establish the card.

Warnock said that the Oklahoma bank sees the prepaid card market
as a global opportunity, and it has a proven record of working in
some of the world’s most underdeveloped card markets.

“We look at the prepaid market nationally, really, and we work
with banks to market the cards in their geographic areas and we see
incoming inquiries every day with a migrant worker population that
need a card,” she said.

Undaunted by its relatively diminutive size and the difficulties
of supporting multi-lingual card products, Central National has
built a single niche offering into a real powerhouse.

“Banks our size don’t usually get into this kind of work,
because it takes a tremendous investment, but we saw the
opportunity to reach our unbanked Mexican population and we knew
that payroll would be the way in, and it’s one of the real sticky
products you can sell,” she said. “If we get them a card and they
are getting these recurring deposits on them, it quickly becomes a
real loyal base.”

Latin America ripe for growth

Anabel Perez, CEO of NovoPayment, a leading Latin American
prepaid issuer, said that the region is rife with opportunity.

“In Latin America, approximately 75 percent of the population
has no access to financial services,” Perez said. “This is a huge
segment that remains outside of the formal banking network. These
are the consumers who work as taxi drivers, restaurant workers,
street vendors and maids. Some of them have home-based businesses.
They earn less than $10,000 a year and spend an average of 10 hours
a month paying their bills in person, which cuts into the hours
they have available to make a living.”

Perez said there is market enough for a host of players.

“In this business, it’s not a matter of competition but
collaboration,” she told CI. “All players – banks,
retailers and processors – are beginning to understand that this is
a specialised industry and each of them has a specific role to
play. There are opportunities for all: for example, banks can
expand their customer base, generate new income, create new
products, particularly for business clients and leverage product
distribution via prepaid.

“Retailers can generate revenue and provide added value for
customers, especially their low-income customers. Processors can
provide new value to banks and retailers and have a role in the
reloading network, which is not currently a part of the business.
Everyone will benefit in the long run.”