The Philippines provides a perfect target market for a prepaid card when considering many of its nearly 100 million residents do not engage in traditional bank services, and only an estimated 7.5 million carry credit cards and 31 million have debit cards.
Those demographics paint a picture of opportunity in the eyes of Hong Kong-based MoneySwap PLC and Riza Commercial Banking Corp., which began offering MoneySwap prepaid cards Jan. 19 as a way to provide Filipinos who do not use traditional bank services access to a card that will support online purchases, bill paying and fund transfers.
The partnership between Riza Commercial Banking and online and international payments provider MoneySwap to offer the cobranded Visa card represents another chapter in how the prepaid card market is changing, an industry analyst contends.
“Banks are becoming much more involved in prepaid cards because it is a very profitable space with a lot of potential,” Brian Riley, senior research director and analyst with Needham, Mass.-based TowerGroup, tells Payments Source.
Riley points to personal-finance guru and television personality Suze Orman’s latest venture into the prepaid card market with a “savings” card as a signal of how the concept is advancing in the payments world as a way to provide services to underbanked or financially strapped consumers worldwide (see story).
Filipinos applying for a MoneySwap prepaid card must provide a government-issued identification card to any Riza branch location, MoneySwap stated in a press release. An applicant receives a card after paying a fee of 150 pesos (US$3.44) and the bank verifies his personal information.
Cardholders may load funds into the card account, which has no minimum-balance requirement, through deposits at an ATM or at a Riza bank branch, according to a MoneySwap press release. They also may use the card to withdraw money from an ATM or at a bank branch or to make purchases where Visa is accepted. Fund-transfer fees vary, depending on the currency used, according to the MoneySwap website. Neither Money Swap nor Riza Commercial indicated whether cardholders would pay an annual fee.
MoneySwap primarily is targeting those Filipino consumers who make more than 50% of their purchases online because the prepaid card becomes part of MoneySwap’s electronic wallet, which supports funds transfers and online bill payments and purchases.
Riley views the online aspect as a major selling point for any prepaid card.
“Giving these people a way to operate on the Internet to make online purchases is a real positive,” Riley says. “The cards are really enabling in that they open the market to a lot of people who otherwise could not get involved.”
Because cardholders can deposit and withdraw funds, transfer funds to other cardholder accounts or make bill payments online, MoneySwap executives say the card will “change banking” in the Philippines.
“We view the Philippines as a key market for MoneySwap because it has a population of nearly 100 million, many of whom work overseas or for international organizations,” Richard Proksa, MoneySwap CEO, stated in the press release.
The card also serves as a currency-exchange card to make purchases or withdrawals abroad, making the card “highly relevant” for those who travel often, Proksa said.
Riza Commercial Banking seeks to expand its cash card base in the Philippines in 2012, though bank executives stated in the release they do not expect revenue gains from the card until the end of the next fiscal year in March 2013.
“MoneySwap is an innovative new player in the Asia market with a rapidly expanding reach,” said Remo M. Garruvillo Jr., Riza Commercial senior vice president of channel and product management for the retail banking group. “They provide us with important additional prepaid card distribution.”
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