Options for the Unbanked

Miami-based NovoPayment has partnered with Sambil Malls Group to introduce the Sambil Visa Gift Card at Sambil Mall in Caracas, Venezuela. This was the first time that a prepaid, reloadable payment card has been offered by a Latin American shopping center.

Sambil Mall Caracas is one of the largest retail properties in that country, with 3 million sq. ft. and 500 stores.

The Sambil Mall Group and NovoPayment plan to deploy the gift-card program at Sambil’s shopping centers in Valencia, Margarita, Maracaibo, San Cristobal, Barquisimeto and Punto Fijo later this year.

What makes the introduction of prepaid, reloadable payment cards most compelling is the unique demographic profile of Latin American consumers. Retailers operating stores in Latin America appreciate the need for this payment option, and any retailer contemplating expansion into that region will welcome the arrival of prepaid cards.

NovoPayment has estimated that in the 15 Latin American countries there are more than 300 million unbanked consumers who would qualify for a prepaid card.

“Latin America’s demographics are so different than in the U.S.—there are huge income disparities and a large sector of the population has had to rely exclusively on cash transactions,” stated Anabel Perez, president and CEO of NovoPayment. “Between 65% and 70% of the population does not have a bank account, but this same group accounts for 45% of the purchasing power.”

Prepaid, reloadable payment cards provide an instrument that the unbanked population group can use to establish financial credibility and “evidence of cash flow,” Perez explained to Chain Store Age. “This tool will permit consumers to apply for credit at retail stores or loans at banks. It gives them access to POS systems and ATM machines and is improving their way of life.”

From the retailer’s perspective, it will change the way they do business, providing a way to establish loyalty programs and potentially gain more knowledge of their consumer base.

NovoPayment implemented Latin America’s first mobile peer-to-peer (P2P) funds-transfer program using short-message service (SMS) and the first prepaid general-purpose debit cards not to require bank accounts.

The solution for mobile payments is particularly relevant because, Perez noted, “Latin America has a high rate of cell-phone penetration. Sixty-one percent of the population has a cell phone and 95% of those cell-phone owners are part of the prepaid-card base.”

The maintenance fee for a NovoPayment reloadable-payment card is about one-third the cost of a basic bank account.