MasterCard and Western Union have
expanded their global prepaid partnership to further drive global
person-to-person, cross-border e-money remittance. Duygu Tavan
speaks to Mike Hafer, Western Union’s vice-president, global cards,
and Ron Hynes, MasterCard’s executive vice-president, global
prepaid solutions, to find out more
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Both MasterCard and Western Union are already
global payment heavyweights. With the continuing rise of prepaid
cards and consumer demand for person-to-person cross-border
payments, the two companies have now announced an extended
partnership to tap into the cross-border remittance market.
Part of the expansion of the relationship is
an interoperable network, which will enable consumers to remit
funds from a Western Union agent to eligible MasterCard accounts
and give them more options when transferring funds. The service
will create a seamless remittance gateway that will include
card-to-card, card-to-cash, cash-to-cash and cash-to-card
transfers.
In the US, this service is already available on over 1.2m cards.
The next focus will be on Europe and Latin America, according to
the executives.
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CI: This is an extension of an existing contract.
What is different now?
Hynes: It really is an extension, which went
into effect in September 2010. That was exclusively on prepaid and
prepaid card issuance in the US.
There are three nuances to the announcement.
Today, we announce the expansion to include prepaid card issuance
globally. It is also an extension beyond prepaid to create an
interoperable capability for the two networks to deliver more
efficiency, speed, convenience, security.
The third aspect is adding a capability, globally, for
MasterCard prepaid card holders to add money at Western Union
locations and it provides Western Union card holders to re-load
their cards not only at Western Union locations, but also at
MasterCard rePower stations. So the service available offer will
cash to card, card to cash, card to card and cash to cash
remittances.
We have had programmes that we launched in advance before this
announcement. Now we are formalising the partnership globally. It
will simplify the remittance process.
CI: When you say the service will simplify the
process of transmitting money, what do you mean
exactly?
Hafer: We will bring together our global
payments networks, to work together more seamlessly. So consumers
can use both the physical WU agent locations for cash in/out, as
well as MasterCard-branded prepaid, credit and debit cards for
sending and receiving money.
CI: Will this partnership require investment in new
technology, devices etc? Does this require sharing a single
platform?
Hynes: No, it will be about sharing and passing
information between the two platforms.
Hafer: The goal is to not require new POS
equipment, but it will depend on the individual market. Our goal is
to utilise our POS distribution network to implement the
service.
CI: You said the service will be available to
eligible MasterCard holders. Which cards will meet that
requirement?
Hynes: We will work with our partner banks
worldwide and get them to enable card holders to receive money
transfers on their card. We want to make it easy on the origination
and receiving end.
If a banked consumer in the US wants to send money to Kenya, our
vision is that the US consumer will have an application on their
phone or their bank’s website, or from a WU agent, to initiate a
remittance from the MasterCard account.
If the receiver in Kenya has a MasterCard account, they will
receive a notification and receive it directly on their card
account, or decide to collect it in cash from a Western Union
agent.
CI: Where is your particular focus, after the
US?
Hafer: We will have programmes in the coming
months in Europe and Latin America. There is a variety of countries
we are focusing on globally, but Europe and Latin America are the
ones furthest along. There will be specific announcements over the
next 60-120 days.
CI: In which countries do see a particular business
case for the service?
Hafer: We categorise our markets by developing and developed, or
send and receive markets. If you look at receive markets around the
world, some of our core remittance businesses are in countries such
as India, Philippines, Mexico, Nigeria and other African countries.
If you look at it that way, this is an indication of countries we
will consider sooner rather than later.
Then when you look at the developed countries, you need to
consider the consumer needs in that specific market. For instance,
the UK is one of the markets we will kick off the service in. We
will first launch a chip-and-PIN gift card and then shortly after
we will launch a re-loadable card in the UK that will offer the
remittance service.
