Reload Competition Heats up with Visa’s MoneyGram Deal

Visa Inc. will quintuple the size of its Visa ReadyLink prepaid card reload network when the big money-transfer firm MoneyGram International Inc. enables its 40,000 U.S. locations to add funds to prepaid cards under a deal Visa announced Tuesday. The MoneyGram locations will make Visa's reload network nearly as big as MasterCard Inc.'s rePower network?intensifying prepaid card competition in general, and especially rivalry for partners that can help the card networks reach the so-called financially under-served market. Both the Visa and MasterCard reload networks enable consumers to take a prepaid card to a participating location to add funds to it with cash. A MasterCard spokesperson says rePower has about 50,000 locations through the Green Dot Corp. network, and MasterCard has tests underway that could add another 10,000 locations. ReadyLink currently has about 8,000 locations, including 7-Eleven Inc. convenience stores and Safeway Inc. grocery stores. When the new locations come on line, holders of Visa ReadyLink-enabled prepaid cards will be able to add funds in real time anywhere MoneyGram Money Transfer and ExpressPayment services are offered. Visa says its research shows 80 million U.S. consumers don't have access to a bank account or a payment card. According to Visa, underserved consumers earn about $1 trillion in annual income, pay more than $1 billion in check-cashing fees each year, and rely heavily on cash for common transactions. The payment card networks, specialty prepaid card processors and networks, and card issuers all are trying to transfer those transactions to a variety of prepaid cards. Brian Triplett, Visa's global head of prepaid products, tells Digital Transactions News the MoneyGram deal will help Visa integrate prepaid cards with other payment services, making them less of a stand-alone product. “This adds significantly” to that effort, he says. In a statement, Greg Waltz, vice president and general manager of payment products at St. Louis Park, Minn.-based MoneyGram, said, “our relationship with Visa strengthens our ability to provide consumers with even more convenient options to manage their finances, which is especially critical in the current economic environment.”