Mastercard is launching an electronic “virtual wallet” to target migrants and households without bank accounts in September.
Called Cashplus, the pre-paid Mastercard will enable customers to buy ready-to-use cards in retail outlets, in much the same way as mobile top-up vouchers and phone cards.
Mastercard Europe and partner Advanced Payment Solutions (APS) hope to tap into the several million UK people who are currently termed as “unbankable”.
APS chief executive Rich Wagner says: “The target market is the unbanked, also known as financially excluded. There are more than 2 million households in the UK which do not have a current or savings account and about half of the adult population do not have a credit card.
There are also about 7 million migrants, who often do not meet the requirements to set up a bank account. The card will offer them a secure payment facility.”
Prepaid payment cards do not require card holders to undergo a credit check or have a bank account to get a card. They act as a virtual bank account, allowing funds transfers and top-ups but without cheque, credit or overdraft facilities. The card can be spent across the Mastercard global network, and can be used to purchase goods online and withdraw money from cash machines.
The card will be marketed primarily through in-store marketing, which APS will handle. The Finex Group, a financial communications marketing agency, will handle below-the-line work.
Prepaid payment cards were launched in the late 1990s and have grown into a multi-billion dollar business in the US and Europe, but have been slow to catch on here. Visa Europe recently entered the market in the UK with bank MBNA Europe by launching a Gift Card and Travel Card.
The chip-and-pin Cashplus is believed to be the first card of its kind in the UK. Several high street banks are thought to be eyeing the sector with interest.