By Paybefore Staff
MasterCard Worldwide recently announced it has partnered with Spanish-language media company Univision Communications Inc. to launch two prepaid cards in the coming year aimed at the Hispanic market throughout the United States.
The reloadable Univision Prepaid MasterCard Card (Tarjeta Univision MasterCard Prepagada) and the Univision MasterCard Gift Card (Tarjeta de Regalo Univision) will be available nationally sometime in 2010, according to a press release. And, while there have been other notable efforts to engage Hispanic consumers with prepaid products, according to at least one expert on the underbanked, Univision’s involvement presents an “extraordinary” opportunity to reach this significant demographic.
The Purchase, N.Y.-based card network and Univision have worked together previously when they targeted the same demographic with a financial education and marketing initiative this May that included prepaid (Paybefore May 18, 2009).
“The financial services offering we’ve announced is, indeed, an extension of the ‘Cuentas Claras’ (‘financial know-how’) initiative and partnership between Univision and MasterCard,” Laura Kelly, senior vice president, global prepaid solutions, MasterCard Worldwide, tells Paybefore. “Out of this initiative we had identified a need within the Hispanic community for financial tools, resources and services that empower our communities. Univision is a brand that has proven it understands the U.S. Hispanic community and has achieved the trust of this significant population segment.”
Hispanic Market Opportunity
According to the Center for Financial Services Innovation, Hispanics represent 19 percent of the underbanked population in the United States, totaling 20 million individuals. But, in addition to the raw number of underserved people who make up the market opportunity, Rachel Schneider, innovation director at the Chicago-based nonprofit, tells Paybefore that the group has several characteristics that make it even more attractive to prepaid marketers.
“Latinos are unlike the rest of the underbanked population, which is more evenly split between people who don’t have any bank account versus people who have a bank account and also use other services,” Schneider explains. “Among Latinos, we predominantly see people who do not have any bank account. Seventy-five percent are entirely unbanked. So, of that 20 million, 15 million have no checking or savings account whatsoever.”
CFSI research also has shown that Hispanic consumers have a strong willingness to perform financial transactions outside of banks and credit unions. And, it is a demographic that is open to prepaid. When asked in a CFSI survey if, fees being equal, they would prefer a checking account to a prepaid card, 47 percent indicated they would prefer prepaid.
“It’s an amazing opportunity that Univision is targeting here,” she notes.
Media Giant Enters Financial Services
Univision sees offering a financial product as a natural extension of the ‘Cuentas Claras’ (‘financial know-how’) financial literacy initiative it undertook with MasterCard and compatible with its mission of informing, empowering and entertaining the Spanish-speaking community in the United States, according to Ted Zagat, senior vice president of franchise development and strategic partnerships for Univision.
“We recognize, better than anyone, the importance of empowering Hispanics by connecting them with financial tools and services they can trust,” says Zagat. “Univision’s prepaid card will offer this financially underserved population an opportunity to access a financial product that enables them to securely make purchases—both online and offline—and better manage each and every transaction they make with the card. As a result, we believe this is both a significant business decision for Univision and a product line that will truly benefit our audience of Hispanic consumers across the U.S.”
Zagat points out that given the reach of its Spanish-language media properties—which include national network television, local TV stations, radio and Internet—there is a significant opportunity for Univision to inform and educate the U.S. Hispanic community about its prepaid products. Details of how exactly that will happen, he adds, are still being determined.
Univision: A Trusted Brand
While Zagat can’t divulge specifics about how Univision will leverage its media properties to inform its many viewers about prepaid, Schneider notes that Univision’s brand, with a platform that caters to a multifaceted audience, could provide huge advantages over other companies trying to market prepaid to Hispanics.
“Univision is an incredibly trusted brand. It’s on in every Latino household in the country,” she says. “One of the things that’s powerful about the brand is it has built a presence among all the segments of the Latino market, which is diverse. Univision has already developed the sophistication to talk to all these audiences. I think that’s been one of the big stumbling blocks for other entrants in the prepaid space that have tried to target the market.”
Schneider says the company’s ability to leverage TV, radio stations, in-person events and a substantial community presence as marketing and distribution outlets makes it particularly well-positioned to serve the market.
“To have a major media platform on which you can base communication about what the card product is, is extraordinary,” she says. “The general awareness that everybody in the prepaid industry knows is a problem, Univision is well-positioned to take a pretty substantial swipe at, if not fix it all together. They have a platform and the ability to speak to underbanked consumers in a way nobody else in the marketplace is.”