Western Union is expanding its relationship with MasterCard on two fronts, by focusing narrowly on tax preparation stores with a prepaid card and expanding its remittance program in Latin America.
Starting the week of Feb. 4, people filing federal and state tax returns at the approximately 5,000 tax-return preparation offices that offer services from Advent Financial can choose to receive refunds on the Get It Prepaid MasterCard, a general purpose reloadable prepaid card from Western Union and Advent.
The prepaid card is an attempt to reach underserved and underbanked consumers, which are estimated by the FDIC to total about 28% of consumers in the U.S. "It brings financial services to people that don't have access to those products," says Mike Hafer, Western Union's senior vice president of global stored value.
The difference with the new card is it specifically targets tax preparation locations.
"It gets the consumers their money faster and gets them money in a tool that allows them to manage funds more directly," Hafer says. "If you were getting a check form the government, you would cash it, but couldn't use it to shop online, for example."
The new product, which can be reloaded at Western Union's 45,000 agent locations in the U.S., joins other Western Union products that can preload tax refunds, such as the MoneyWise Visa prepaid card, the Gold card; and a cobranded card with the Telemundo television network.
Other card companies are also active in prepaid tax refund cards: American Express' Serve allows links to bank accounts and can be used at ATMs; the Upside Visa prepaid card and Ready from Visa also allow tax refunds to be loaded onto prepaid cards.
Western Union also extended its AirPak and MasterCard partnerships in Central America to include Costa Rica and Guatemala.
People who are receiving remittances in those countries can direct all or part of the funds directly into a reloadable, general purpose prepaid card. The cards were first launched in El Salvador last year to respond to what the company said was a growing demand for prepaid remittance in Central America. As with the tax refund product, Hafer says the goal is to extend more control and flexibility over financial management to a largely cash-only environment. Mobile money and prepaid cards have proven to be a useful way to extend financial services to underserved regions, with programs such as MPESA in Kenya providing a means to boost financial services in emerging economies.
"The percentage of consumers in those countries that have bank accounts is quite low, about a quarter to a half of the total population," Hafer says.