MasterCard re-Power prepaid cardholders can now reload or top-up their card accounts at any of more than 45,000 Western Union locations in the U.S., improving the appeal of the card to the underbanked worldwide.

MasterCard Inc. and Western Union Co. announced a partnership late last year, starting with the global capability to send money wire transfers from a prepaid card account, or receive a wire transfer to load money onto the card. 

"Western Union is clear about their vision for enabling a cash reload on a prepaid card, and they view it as part of their core business so that the unbanked can use Western Union like a bank," says Elise Mazzetti, MasterCard's senior business leader for global prepaid products.

With the addition this week of the Western Union locations for loading cash onto cards, MasterCard claims to have the largest open reload network in the U.S., with more than 100,000 locations when including major retailer sites such as Walgreens, RadioShack and Wal-Mart.

The companies plan to make similar MasterCard prepaid reload services available at Western Union locations around the world in upcoming phases of the partnership, Mazzetti says.

"There is a tremendous opportunity globally to serve those who are underserved and not using traditional financial services, but they spend a lot of money," Mazzetti says.

Allowing users of MasterCard prepaid cards issued by any bank in the U.S. to reload at Western Union locations addresses the needs of millions of U.S. adults who fall into the unbanked or underbanked category, Mazzetti says.

In a recent study, the Federal Deposit Insurance Corporation cites 68 million adults as living in "underserved households" in the U.S., while Moody's Credit Outlook report on Sept. 17 indicated 9.9 million unbanked households and 24.2 million underbanked households existed in the U.S. in 2011.

In just two years, the country added 800,000 unbanked households and nearly 3 million underbanked households, Moody's reported.

Western Union states its research indicates 66% of prepaid cardholders surveyed in the U.S. preferred to use cash to reload their cards.

"One component of our partnership with Western Union in every market is to build a network for loading cash onto prepaid cards, to turn that into electronic money," Mazzetti says.

It is important to any prepaid card program to increase the locations where the prepaid account can be reloaded, says Maria Arminio, president of Avenue B Consulting Inc., a Redondo Beach, Calif.-based payments management consulting firm.

Because of the growing number of underserved in America, Arminio expects to see more companies in the prepaid card or money-transfer business attempt to provide similar expansion or services in the future.

"I think the recession brought on a budget-consciousness that is more prevalent, and more consumers are turning to prepaid cards," Arminio says.

When prepaid cards were originally introduced as payment tools they were considered "disposable" because they carried a certain amount of money with no reload options, Arminio says.

Now, prepaid cards have many features that have made them a more popular option for consumers, she says.

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