Magazine article American Banker

First Data Unit, Moneyflow Target Hispanic Travelers

Magazine article American Banker

First Data Unit, Moneyflow Target Hispanic Travelers

Article excerpt

Two financial services companies are offering Latino immigrants products and services that are linked to an important rite: going home to see their families.

First Data Corp.'s Western Union of Greenwood, Colo., has created partnerships with Continental Airlines, Aero Mexico, and LAN Airlines to let customers pay for tickets with cash at Western Union locations.

Moneyflow Capital Corp., a Las Vegas company that makes short-term consumer loans in Canada, says that by July it will begin installing kiosks in Latino-owned travel agencies in southern California for marketing lines of credit.

Joe Jackson, the president of Western Union's payment services, said in an interview Monday that it is marketing its service to "folks with no credit card, or whose card is rejected."

To access the service, travelers book a flight either online or over the phone and bring a confirmation number to a Western Union location, Mr. Jackson said. Western Union charges $14.95 for each transaction.

The service is "more convenient" for consumers than going to an airline ticket counter, and Western Union gets "an opportunity to utilize our distribution network throughout Latin America," he said.

Western Union has signed similar agreements with two other airlines, Mr. Jackson said; those agreements will be announced by the end of the summer. "Once you can establish the service with a couple of the major airlines, then the rest will jump in."

Moneyflow is getting even closer to the travel process. It will put three-foot-square self-service kiosks equipped with phones in the travel agencies. Customers coming in to book flights will be able to call a service center Moneyflow plans to open near Los Angeles. Phone reps will offer them lines of credit for as much as $1,000 to pay for their travel and other needs.

Wayne Mah, the president and chief executive of Moneyflow, said in an interview Monday that his lines will have terms of up to two months and will be available to any borrower with a bank account. They will require no up-front fee.

Moneyflow may take out a line of credit or borrow in some other form from a bank to begin funding the business, Mr. Mah said. Regulators have discouraged banks from doing business with payday lenders, but he said his unsecured product is designed to be a cheaper alternative to California's hundreds of well-established payday loan stores.

The Moneyflow lines will have terms of up to two months and will be more "flexible" than payday loans, which are typically for smaller amounts and have terms of 14 to 30 days, he said.

He also wants to keep the annual percentage rate on his lines below 60%.

Jerry Robinson, who heads CompuCredit Corp.'s Valued Services LLC payday lending unit, called Moneyflow's prospective customers "an interesting market, but it's truly an unsecured market, and it will be interesting to see whether people will pay back loans for services with very little underwriting on the credit. …

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