Magazine article American Banker

A Warning on Money Transfers

Magazine article American Banker

A Warning on Money Transfers

Article excerpt

If banks and money transmitters do not develop their own money transfer cards, Bank of America Corp. could capture a significant share of the remittance market in three to four years, a report released Tuesday said.

Over the next year the number of Visa and MasterCard money transfer cards in the United States will grow 175%, to 1.1 million, according to the report by the Boston research firm Aite Group LLC. Remittances sent through the cards next year should rise 180% from last year, to $1.4 billion.

B of A, which has issued about 100,000 SafeSend cards, will account for much of the growth, according to Gwenn Bezard, a co-author of the report.

"With SafeSend, Bank of America is making one of those small steps that consolidates its appeal to the Hispanic market. As Bank of America takes the lead in the money transfer niche, rivals should awake," he wrote in the report.

Banks "should not wait too long" before starting their own programs, either through in-house products or third-party arrangements, the report said.

Money transfer cards, which are loaded at agent locations for a fee, can be used to make purchases or to withdraw cash at automated teller machines.

B of A, Citigroup Inc., U.S. Bancorp, and other banking companies have been particularly interested in the cards, according to the report, which predicted that additional cards will be issued over the next few years in Latin America and the Asia-Pacific region.

"SafeSend's recent performance indicates that money transfer cards should be taken seriously," Mr. …

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