Banking on its brand and reputation for handling and transporting money securely, The Brink's Co. plans to enter the payments industry with a prepaid payroll card during the first quarter of 2013.
Austin, Texas-based NetSpend Holdings Inc. has agreed to sell the Brink's Money payroll card to U.S. employers, while operating as the card's program manager and payments processor, the companies announced Jan. 8. NetSpend provides general-purpose reloadable prepaid cards and financial services to underbanked consumers in the U.S.
"This is a new business for us, and part of our effort to get into the payments business," says Ed Cunningham, director of investor relations and corporate communications for Brink's.
The Richmond, Va.-based global cash handling and security provider believes it has a favorable brand image that customers have grown to trust, Cunningham adds.
Madeline K. Aufseeser, senior analyst with Boston-based Aite Group, agrees that Brink's reputation will go a long way toward making the prepaid card a success.
"When you think of the name Brink's, it signals security and safety, and that will make people feel pretty good about this," Aufseeser says.
It's not likely that Brink's will stub its toe in the payments market, especially with NetSpend serving as "the engine behind this prepaid card," Aufseeser adds.
"It's a really good match for these two companies, as both have had a high success rate in their businesses," Aufseeser says.
The growing prepaid card market has had the potential to boom in the next three years, especially if some payments companies gained strength through consolidation, Aufseeser predicted in an Aite report published last month.
"It's not a consolidation, but this is a good example of a partnership that will work," she says. "It's really co-branding, as opposed to NetSpend just being the program manager."
The potential consumer interest in prepaid cards is certainly not lost upon Brink's.
"There is a demand for this kind of service and we'll be targeting the employers who are already existing customers of our security business," Cunningham says.
The product could also boost Brink's revenue in the U.S. market.
Brink's generates $4 billion in revenue annually, with 25 percent of that in the U.S. and 38 percent in Latin America, with the rest spread out in Europe, Cunningham says.
Nearly a year ago, Brink's established its Global Payments division with the goal of expanding the company's bill payment processing services to include prepaid cards, money transfers and mobile payments. The division includes ePago International Inc., a Panama company specializing in billing and payment processing in South America and Mexico.
San Diego, Calif.-based BofI Federal Bank will issue the Brink's Money prepaid MasterCard debit card, Cunningham says.
Brink's plans to provide the Brink's Money payroll card to its own employees "to demonstrate our commitment to this product," Brink's chairman and CEO Tom Schievelbein stated in a press release.