Western Union Provides Underbanked With Financial Dignity
Western Union made headlines twice in one day last week, announcing two milestones that advanced its global stored value strategy in two pretty big ways. Market Platform Dynamics CEO, Karen Webster, spoke with Mike Hafer, Senior Vice President Global Stored Value for Western Union, to get behind the headlines. Hafer shared some of WU’s plans for making these products sticky, what they have learned from talking to customers, and why financial dignity is such an important part of WU’s mission.
Western Union Provides Underbanked With Financial Dignity
There are a plethora of reasons why millions of people in the U.S. and billions of people around the world fall into the unbanked or underbanked categories. Some truly distrust the financial system and refuse to store their money and savings with others. For others, traditional financial tools are simply too hard to access, or don’t solve problems they face in their everyday lives.
Yet for a significant portion of the unbanked population, their lack of financial tools can be attributed to a simple and fixable problem: they don’t know such tools exist in the first place.
That’s something Western Union is setting out to change, making two major announcements this week that will bring financial tools and financial awareness to huge populations in the Western Hemisphere. Market Platform Dynamics CEO Karen Webster spoke with Mike Hafer, Senior Vice President Global Stored Value for Western Union, to discuss his company’s moves and what they could mean for the financially underserved in North and Central America.
The first topic Webster and Hafer broached was Western Union’s recent agreement with Advent Financial to provide tax refunds through prepaid cards. While the benefits this provides to the underbanked are obvious, Webster asked Hafer what utility the cards had after the tax refund had been spent.
“That’s a key, not only having a product where you can get your refund dispersed on it — I think a solid idea, and of course I think many people will do it,” Hafer said. “But I think the more important point is the one you just addressed, which is, so, what about after the refund is spent or gone off the card?”
According to Hafer, the card can be reloaded after the tax refund has been spent and then functions much like any other Western Union prepaid card. This is where the Get It Card can really help the underbanked and pull them into the mainstream financial sector.
“First and foremost, the product is reloadable at any Western Union agent location throughout the U.S.,” Hafer said. “Secondly, we also have integrated the ability to actually send a Western Union money transfer from this product, as well as using the online account management site that the consumer gets access to when they sign up for the product.
We believe these types of products and features really extend the usefulness and the utility of the product, really making it a more sticky product for the consumer,” Hafer reasoned.
After exploring the benefits of the Get It Card, Webster then questioned Hafer on his company’s expansion into two new Latin American markets: Guatemala and Costa Rica. With the addition of the two sites, Western Union is now available in 12 countries around the world; something Hafer says comes down to his company simply meeting a need.
“When you look at the different products in the marketplace, its really coming down to how do you make sure you target consumer segments where there are needs that can be met, and then tailor the product offering to meet those specific needs,” he said.
Hafer went on to point out that around three-quarters of Guatemala’s population do not have bank accounts, while the same is true for around half of Costa Rica’s population. By offering an “open loop, reloadable prepaid MasterCard card,” Western Union is able to offer such populations financial tools they were not only previously unable to obtain, but in same cases were unaware even exited.
“It provides additional convenience, certainly more access to places that maybe they’ve never considered before, whether it be shopping at certain grocery stores or malls, and also shopping online,” Hafer said.
“Financial inclusion, providing financial dignity and access to a product like this is something that consumers are very excited about, and something that they really didn’t expect. That’s one of the reasons we’re exciting about the extension into these two countries.”
To hear more from Webster and Hafer on Western Union’s international expansion, the company’s deal with Advent Financial and more, listen to the full podcast below.
(If you have trouble with the audio player, click here.)
Mike Hafer, Senior Vice President, Global Stored Value Western Union
Mike Hafer currently serves as Senior Vice President, Global Stored Value. In this role, Mike leads a global team that develops and manages Western Union’s award-winning stored-value offerings. These customer accounts are available in a variety of forms, including prepaid cards, mobile phones and the Internet. With multiple programs live in 9 countries across 4 continents serving diverse customer needs, the Global Prepaid organization under Mike’s leadership is developing deeper Western Union customer relationships while delivering strong revenue growth.
Prior to his current role, Mike led product development for the company’s domestic money-movement business with focus on new growth arenas including prepaid and financial institutions. During Mike’s 10-year tenure at Western Union, he also led the U.S. CRM group and was responsible for the development and rollout of Western Union’s industry-leading Gold Card rewards program.
Prior to working at Western Union, Mike held multiple B2C and B2B marketing and product management roles for US West, The Signature Group and Izodia.
Mike attended Northwestern University, where he earned a Master of Science degree in Integrated Marketing Communications with an emphasis in Direct/Database Marketing. Mike also attended the University of Northern Colorado and graduated Magna Cum Laude with a Bachelor of Science in Business with an emphasis in Marketing. Mike also has served as an adjunct professor at Denver University, teaching various graduate-level marketing classes.