Dollar General will now serve as a quasi-provider of financial services for the underbanked. The discount small-box retailer will begin offering two different Western Union prepaid cards in 10,000 of its stores.
It will offer the Western Union MoneyWise card, Western Union’s standard reloadable prepaid option, as well as the Western Union Telemundo card. Both are run through MasterCard’s debit network, and have similar fee schedules.
The Telemundo card in particular is aimed at Western Union’s Hispanic customer base.
“The Western Union Telemundo card has been very successful among Hispanic consumers,” said Tim Sloane, director of prepaid advisory service at Mercator, in prepared remarks. “The card combines two brands Hispanics trust: Western Union for financial services and Telemundo for information.”
Neither card is a new offering, but pairing with a discount store like Dollar General certainly increases Western Union’s reach with its target consumers: poorer Americans who are more likely to rely on alternative financial services. Dollar General will hardly be the first to recognize the wisdom of selling prepaid cards in a discount retail environment. Walmart sells a number of prepaid cards in its stores, and Kmart just introduced one of its own last week.
The cards are both decently priced, the sole exception being a shortcoming that comes from being Western Union cards: the reloading fees. The cards have no monthly fee, no transaction fees, and allow for free direct deposit. They charge $1.95 per ATM withdrawal, plus whatever the ATM charges — this can quickly add up, but assuming consumers use the cards to pay where they cannot pay with cash, maybe not so bad. And, worst of all, both cards charge $4.95 for every reload. This is Western Union’s core business after all: moving money around for consumers who have no other options.
Also, the cards also charge an inactivity fee of $2.95 after 120 consecutive days of non-use.
It’s not the most generous prepaid card, but it’s hardly the worst. Their placement at Dollar General will certainly make them easier to find than, say, a bank’s much more competitive prepaid offerings — but we pay a price for convenience.