Euronet Worldwide Inc.'s decision to rebrand its PaySpot Inc. unit is part of a push to develop an international bill-payment and remittance system.
Euronet, of Leawood, Kan., announced last week that it had consolidated the six brand names of its PaySpot prepaid unit worldwide into a single brand, epay. Eric Mettemeyer, a Euronet vice president, said the move was the culmination of years of acquisitions and technology integration.
Mettemeyer, who is also the president of epay's Americas business, said that one of the first products to result from this effort is an international reloading system for prepaid phone minutes that was released in November and lays the groundwork for additional services.
The phone top-up service "was primarily targeted at tourists, but we've taken a different spin on it now to target the immigrants, and so it has a lot more opportunity and momentum at this point," he said. The eventual goal is to allow not just minutes but money to be sent to relatives in other countries.
Today, users can reload the phone accounts of their friends and family members abroad; recipients of these phone credits can use them for anything their carriers offer, including airtime, text messages or digital content such as ringtones. They cannot be redeemed for cash.
Euronet is currently studying how to take that system further, by permitting recipients to use their phone credits to make purchases from other merchants, he said. "It's generally most successful in a country where they don't have large existing credit card networks," Mettemeyer said. "They don't have a large plastic infrastructure and therefore the mobile phone leaps the plastic technology and they start using the phones as currency."
The long-term goal is expanding the service to offer remittances; in the short-term, epay is working with other billers, such as utilities, to duplicate what it has established with phone companies with other firms, Mettemeyer said. There is a demand among immigrants for the ability to send money to their relatives' billers, he said.
"The reason why they want to do that is because they are able to direct where the funds go, so they have control over the money they are sending," he said. "What we hear is, if they could just directly pay the bills of their loved ones, they would prefer to do that … if they send out $300, they can't guarantee that $300 is going to go to the bills or the groceries."
But there is still a demand for cash sent directly to families, Mettemeyer said. After paying a relative's phone bill, a sender "might send a lesser amount of cash to those persons where they could use it for discretionary spending," he said.
The current service, called international mobile recharge, was launched in November and offered reloads to carriers in 10 countries, mostly in the Caribbean, he said. Today, carriers in 30 countries are connected to the system, and Euronet is looking to expand this within the Americas. Mettemeyer noted that Euronet already has a money transfer unit, Ria Financial Services Inc., though the unit is distinct from epay, its payments unit.
Ria is one "of the pieces" epay could tap to transition from payments into remittance, Mettemeyer said. Right now, epay can look to Ria to see what trends affect its business and determine when the best time would be to attempt a combined or overlapping service.
Meanwhile, epay is looking to expand the geographical coverage for its services. An epay acquisition within the Americas is a "near-term goal," Mettemeyer said. "We are a very acquisitive company. Our prepaid division is the result of multiple acquisitions over the last five years." He would not say how close the company is to its next acquisition.
Though PaySpot remains the legal name of Euronet's payments unit, the epay name was designed to have broader international appeal. The "Pay" half of PaySpot's name was universal, but not every country understood that "Spot" was meant to indicate a geographical destination, he said.
"epay translated into the other countries much better than PaySpot did," he said.
The mobile top-up system also had to be refocused from the audience it targeted three years ago when an earlier version was introduced in Spain.
"There's a big contingent, especially every August, of all the vacationers in Europe going down to Spain," he said. "They were on prepaid plans and they ran out of minutes. They really didn't have an option to top up their phones."
Nicole Sturgill, the research director for delivery channels at TowerGroup Inc., a Needham, Mass., independent research firm owned by MasterCard Inc., said that what Euronet is attempting with epay is "not a far leap from the technology that's out there" today.
"The technology really isn't any different than a cross-border remittance," she said. "It's a cross-border remittance with a purpose."
However, in most cases people are comfortable sending money overseas with the trust that their relatives will use it responsibly, Sturgill said. "Most people are not taking the money and gambling it away."
Where its international bill-pay service could be in demand would be for people who would have been responsible for their relatives' bills regardless of distance, such as parents paying children's expenses in college, she said.