Romania and Kosovo, two post-Cold War states, have all of the attributes of becoming hot markets for prepaid cards. 

Residents of both countries, located in the Balkans and the Balkan Peninsula, have large numbers of residents who pay with cash because they do not have bank accounts.

Kosovo and Romania also have large numbers of the young consumers who may be amenable to paying for products and services with cards, specifically prepaid cards tied to mobile-phone accounts.

Sensing an opportunity long after the end of the Cold War in these two emerging financial markets, RevEurope has begun offering prepaid cards in both countries.
"In places where cash is king, as it is for large segments of the populations in Romania and Kosovo, driving widespread commercial availability of affordable financial products and services represents a significant market opportunity," John Mitchell, CEO of RevEurope, wrote ATM&Debit News in an e-mail.

Dublin, Ireland-based RevEurope began offering Visa-branded prepaid cards in Romania in June and in Kosovo early last month. In both countries, RevEurope partnered with card issuer Raiffeisen Bank, a subsidiary of Vienna, Austria-based Raiffeisen International Bank Holding AG.

RevEurope is a portfolio business of Austin, Texas-based MPower Ventures. MPower's investors founded prepaid card marketer NetSpend Corp.

Last year, some 13.3 million prepaid and "cash function" cards existed in Romania, up 16.7% 11.4 million in 2007, according to the European Central Bank's Statistical Data Warehouse.

The Frankfurt, Germany-based bank defines a cash-function card as one a financial institution issues that has a cash, debit and e-money function.

The central bank did not have similar data for Kosovo, which declared its independence from Serbia, part of the former Yugoslavia, in February 2008.
 "Kosovo is a newly independent, newly established post-war country that is in the process of rebuilding and creating the basic financial infrastructure it needs to develop a healthy economy," Mitchell says. "Romania has had more years to develop and is stabilizing as its economy matures and looks to become part of the eurozone in the coming years."

RevEurope entered Romania and Kosovo to get on the grown floor of an emerging market, appealing to the nations' young consumers.

"For the first time, young, cash-based and mobile Kosovars can enjoy the freedom and security of spending with plastic and the ability to send money domestically," says Mitchell, noting that Kosovo's population is Europe's youngest, with 50% of its 2.2 million residents  under the age of 25.

Youth markets are business opportunities that need cultivation before they start paying off.

"Our hypothesis is that young consumers who tend to be the earliest adopters of technology will embrace this new way to pay, will take advantage of the mobile capabilities readily and lead the way for the broader population, driven in large part by their mobile lifestyles and a desire to shop online to access products that may not otherwise be available," Mitchell says.

RevEurope formed a partnership with IPKO, one of Kosovo's mobile-telephone service operators; Raiffeisen Bank Kosovo; and Better Served Kosovo, developer of the card-processing platform, to introduce the country's first prepaid cards.

Raiffeisen Bank Kosovo began issuing the Raiffeisen Bank Visa Prepaid Card and the IPKO Visa Prepaid Card Oct. 28 in Pristina, Kosovo's capital, says Mitchell, explaining that RevEurope is offering two cards in Kosovo to reach a wide range of consumers.

Applicants can apply for the Raiffeisen Bank Visa card at Raiffeisen Kosovo bank branches, and applicants who do not have bank accounts can apply online for the IPKO Visa prepaid card, where they can pick up at IPKO offices, Mitchell saysIPKO cardholders also can use the cards to top up their mobile phones.

Holders of both cards must load a minimum of 50 euro cents (US74 cents) into the card account.

There is no limit in the amount cardholders can load into the account, Mitchell says.
Jean-Marc Tonti, Visa general manager for the region, said in a statement the prepaid cards will contribute to increasing electronic payments in Kosovo and bring more consumers into the banking sector.

An executive with Raiffeisen Bank Kosovo claims consumer interest in the cards is strong.
"We see tremendous interest in Kosovo for flexible, safe and accessible cash alternatives," Shpend Nura, the bank's head of product management, said in a statement.

RevEurope is encouraging consumer acceptance of both cards by running a special promotion through the end of December in which it will not charge customers a fee to buy the card.

The card's regular price is 5 euros, and the minimum load it 3 euros.
Initially, RevEurope is targeting young consumers ages 18 to 24. "We're looking for individuals who are Internet- and mobile-phone savvy, and then we will go from there," Mitchell says.

Kosovo's  merchants deploy 4,500 point-of-sale terminals in the country. Banks there also deploy some 300 ATMs where cardholders can use their cards. Cardholders also can use the cards to shop online, Mitchell says.

In Romania, Raiffeisen Bank is offering a prepaid card that enables Romanian cardholders to send funds domestically to other cardholders via their mobile telephones, Mitchell, says.

"The cardholder's mobile-phone number is linked to the card account, enabling the cardholder to send a text message from that mobile phone to transfer funds from the card to another cardholder in the country or to check a card balance," Mitchell writes. "The card offers the first mobile-payment service available in Romania. Because it uses [short message service text messaging], the capability is accessible from any handset or any provider."

Bucharest-based Raiffeisen is issuing the Visa-branded prepaid card, and bank customers can purchase the card for 18 ron (US$6.29); the minimum card reload is 10 ron.  The card is available at six bank branches and at an undisclosed number of retail locations, Mitchell says.

Romania has a population of 21.5 million residents, and merchants deploy more than 96,000 point-of-sale terminals. Banks there also deploy some 10,000 ATMs, Mitchell says. ATM

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