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  • Five Keys to a Great Remittance Program

    Posted by on September 23, 2014

    Remittance stand in the Dominican Republic, captured by Coopera's Anna Pena on a World Council of Credit Unions-sponsored trip to the region.

    With intense growth of the Hispanic market across the country, more U.S. credit unions are looking to add money transfer programs, known as remittances, for Hispanic immigrants with family in Latin America.

    And now may be an ideal time to play in the market.

    U.S. remittances to developing countries reached $404 billion in 2013 and are predicted to grow to $516 billion by 2016, according to the World Bank. At the same time, an increasing number of providers have dropped their remittance programs, leaving a competitive opening for credit unions.

    The shuttering of many long-time remittance providers is due to an unprecedented compliance burden. This has also led to the development of an industry that is, as this PaymentsSource article puts it, “ripe for startups.” There are now even international start-ups looking at the U.S. with aspirations of market dominance.

    As the remittance industry shape-shifts to meet increased scrutiny from regulators, some credit unions are looking to find new partners who can help them compete in this important space.

    Credit unions should view remittances services as a value-added tool designed to increase the depth of the membership experience. Coopera’s research (performed in conjunction with the World Council of Credit Unions) found that remittance services, when combined with an intentional Hispanic growth strategy, can earn a credit union much higher volumes as compared to those credit unions without a strategic approach.

    If your credit union is looking to develop or make changes to its remittance offering, here are a few things to keep in mind:

    Understand the geographies you must serve – Not all remittance providers serve the same locales. Before creating a partnership, understand your Hispanic members’ countries of origin and the available locations within a typical recipient’s country.

    Survey the competition – Examine your local market to understand how you can provide the most competitive offering. What other local organizations are providing remittance services? What are they charging? What are their hours of operation, etc.?

    Investigate the alternatives – When issued to a Hispanic cardholder in the U.S. alongside a secondary card for a family member in Latin America, a reloadable prepaid card like the Coopera Card is an affordable and accessible option for sending money outside the country. What’s more, reloadable prepaid cards do not require compliance with the CFPB’s remittance transfer disclosure requirements.

    Know your compliance burden – While the cost of compliance will mostly fall on the shoulders of third-party service providers, credit unions will be held ultimately responsible for providing the appropriate disclosures.

    Develop a member experience strategy – How will the credit union transition first-time remittance users to more products? Incentives like offering the fourth or fifth remittance free can keep remitters coming back to your shop for more remittances, but how will you engage them with other products and servicesfor the long-term?

    Especially given recent industry upheaval, remittances are a much-needed service for Hispanic immigrants with family members residing in Latin America. In fact, Coopera has made remittances a best-practice solution for credit unions looking to invest in the largest, fastest-growing, youngest and most underserved segment of the U.S. population. While there are certainly barriers to entry, keeping the above pointers in mind can help you break through those obstacles to deliver a needed solution to your Hispanic members and prospective members.

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    Your Future Prepaid Cardholders are Hispanic

    Posted by on November 20, 2012

    For the first time in our country’s history, minority births reached 50.4 percent of total births in the U.S. from July 2010 to July 2011, according to the Census Bureau. Of the total births in that year, the Census reveals that nearly 26 percent were Hispanic.

    Looking at numbers, it’s easy to see the question isn’t will Hispanic members be a part of your future, but how soon. By providing dignified financial services to Hispanics, your credit union will not only achieve successful growth for your cooperative; you’ll also make a difference in the lives of your neighbors.

    Competition for this growing segment is heating up. This is why it is incredibly important for your credit union to offer prepaid products that focus their marketing power on differentiation, and understanding how Hispanic cardholders will use your prepaid card products is key.

    Hispanic cardholders may want to use their prepaid card as an affordable way to share funds with family members abroad so it’s important that your prepaid card offering does not limit the amount of cardholders on the account to two persons. Prepaid cards like the Coopera Card, which not only offer cardholders cash loads via in-branch, online, direct deposit and Visa ReadyLink merchants, also allow cardholders to request up to six additional cards for family, whether stateside or outside the country.

    For cardholders looking to use prepaid cards as an alternative to money transfers, presenting an option that charges less in foreign exchange rates, like the Coopera Card that currently offers a foreign exchange rate of one percent compared to the two percent other cards charge, can go a long way toward attracting cardholders to your credit union.

    Also, do not underestimate the strong need for language and cultural relevance with your prepaid card offering. Consult with a specialist who can double check the cardholder’s entire user experience, as well as your credit union’s marketing approach and message to be sure they are relevant. Prepaid cards configured to support the cultural and lifestyle nuances of your target membership, can be incredibly influential in developing long-term members for your credit union.

    Now is the perfect time to begin outreach to the Hispanic community, and prepaid cards can be just the door-opener you need to begin courting this market.

    The content of this blog is based on the Coopera white paper “Prepaid Cards Are Not Created Equal.” Download the paper for free today.

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    Prepaid Cards Perfect for Consumers Fed Up with Soaring Fees

    Posted by on November 13, 2012

    With demand-deposit accounts and debit card transactions so strictly regulated, many of your credit union’s big-bank competitors have imposed a variety of new fees on traditional banking services. This has led to many consumers, both banked customers as well as the underserved, choosing to carry cash or use prepaid cards instead of paying these rising fees.

    Because prepaid cards can be used much like debit cards, to pay bills or make purchases, as well as to withdraw and transfer funds and account information with ATM and text-messaging services, they have become a strong alternative to costly check-cashing services and money transfer services.

    With a focus on fair fees – and more importantly, disclosure of those fair fees – many prepaid card vendors, including Coopera, have voluntarily adopted a fee-disclosure box that makes it easier for consumers to compare prepaid card fees and choose the one that best fits their needs.

    For credit unions, the potential exists to provide a prepaid card that goes beyond simply access to funds via plastic. It is an opportunity for your credit union to build a long-term relationship with the underserved, as well as to convert disenfranchised big-bank customers into loyal members.

    The content of this blog is based on the Coopera white paper “Prepaid Cards Are Not Created Equal.” Download the paper for free today.

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    Do Homework Before Choosing a Prepaid Card Product

    Posted by on November 6, 2012

    Today, the underserved — many of whom choose not to join a credit union or open an account with a bank simply because they do not trust U.S. financial institutions — are frequently using expensive nonbank financial services, like money orders, check-cashing and payday advances instead. Prepaid cards, too, are a growing alternative for this group, who are looking for fast, easy and cheap ways to pay bills and to make purchases.

    To protect underserved consumers, scrutiny of prepaid card products is on the rise. In fact, financial regulatory organizations, like the Consumer Financial Protection Bureau (CFPB), are under enormous pressure to crack down on all manner of so-called predatory services targeting the underserved.

    If your credit union plans to offer a prepaid card product as part of your strategic growth, this is something you need to keep an eye on. Monitoring the situation is not just to protect your business, but it is also so you understand the competitive advantage you can leverage with the right prepaid card product.

    Before you partner with a prepaid card vendor, do your homework — know the differences in the available options (fee structures, terms and conditions, as well as disclosures). To make sure you are bringing the safest, most reliable and best-suited product forward, find the prepaid card that is tailored to match the financial behaviors of your members.

    The content of this blog is based on the Coopera white paper “Prepaid Cards Are Not Created Equal.” Download the paper for free today.

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    Coopera Card Ranks 5th on NerdWallet.com

    Posted by on October 16, 2012

    The Coopera Prepaid Reloadable Visa® Card has been ranked by NerdWallet.com as one of the most affordable, cost-effective prepaid cards available to consumers. The online financial planning resource’s ranking is based on the Coopera Card’s low fees as compared to more than 70 other prepaid card options on the market, including two competing prepaid card products also specifically targeted to Hispanic cardholders.

    The Coopera Card is also the only prepaid reloadable card in NerdWallet.com’s top five ranking that was specifically designed for the Hispanic cardholder and provides a seamless cardholder experience in the language of choice of the Hispanic cardholder.

    Because no two prepaid card products are exactly the same, especially when it comes to fees, like monthly, ATM or transaction fees, NerdWallet.com built an interactive prepaid card comparison tool to help consumers standardize prepaid cards’ disclosures, fee structures and terms and conditions. The tool gives consumers a tailored, at-a-glance understanding of each card’s cost structure and ranks a prepaid card’s affordability based on:
    • Card use, including both signature and PIN transactions;
    • ATM use, including withdrawals and balance inquiries;
    • Reloads, including cash reloads; and
    • Direct deposit and monthly loads, to determine if the user is eligible for a discount.

    One of the ways the Coopera Card keeps costs low, and its ranking on NerdWallet.com high, is by offering fee-free cash loads at the cardholder’s credit union, by direct deposit of payroll checks or through online transfers from an existing checking or savings account, as well as from other credit or prepaid cards. And for the cardholder’s convenience, Coopera Card cardholders can also load cash on their cards via Visa ReadyLink merchants for a fee.

    To see how the Coopera Card compares to other prepaid cards, visit: http://www.nerdwallet.com/prepaid

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    Set Your Prepaid Products Apart from the Rest

    Posted by on October 2, 2012

    Prepaid card options are popping up all over the place. But with very little regulatory oversight, these cards’ disclosures, fee structures and terms and conditions are all different. This can make choosing the right card option difficult for your Hispanic members.

    To differentiate your prepaid card from stand-alone options that are issued directly to Hispanics consumers, you need to do more than simply sell it. Hispanics, particularly non-English speaking or immigrant members, can find the U.S.’s financial services intimidating, confusing or culturally irrelevant. This is not an insurmountable hurdle for your credit union; it’s an opportunity. Take advantage of where your competitors may be falling short — offer an education component to your card’s services.

    A major fear among many underserved, Hispanic and non-Hispanic alike, is that prepaid-card fees will rob them of their hard-earned money. Another fear is that a prepaid card may open them up to the risk of debt. Prepaid cards are designed to do the exact opposite, and it’s vital that your staff be prepared to confront these misconceptions by educating cardholders on the features and benefits of your prepaid card option. Not only do you want to make sure cardholders understand the terms and conditions of the card, but you also want to teach them how to connect the product to their daily financial habits.

    Remember, your goal is to lead your Hispanic members down a path to financial responsibility, and ultimately, convert them into long-term, viable and contributing members of your credit union.

    The content of this blog is based on the Coopera white paper “Prepaid Cards Are Not Created Equal.” Download the paper for free today.

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    Reloadable Cards Offer ‘Foot in the Door’ to Hispanic Market

    Posted by on April 3, 2012

    The following is an excerpt of a newly released white paper by Coopera’s Miriam De Dios covering the potential for reloadable prepaid cards in the Hispanic market. If you’d like a copy of the full paper, send me an email, and I’d be happy to send it over.

    While our consulting capacity has allowed us to observe almost all best-practice tactics out there, we believe FIs that offer a reloadable prepaid card to the Hispanic market will be among those achieving the greatest success. Perfectly tailored to the Hispanic consumer, this type of offering has the potential to ease consumer financial pain, to build trust between cardholders and an issuing FI, and to generate fee revenue and loyalty from a powerful market.

    For FIs interested in the Hispanic market, it makes sense to think in terms of products and services that would appeal to consumers who don’t have a traditional banking relationship already in place. Creating affordable alternatives to meet the needs of underserved Americans not only has the potential to get a foot in the door of the Hispanic community; it also helps your FI lead its customers down a path to financial responsibility.

    Because they don’t allow for overspending, reloadable cards help underserved consumers manage their budget-conscious lifestyle. This puts issuing FIs in a position to nurture the financial growth of prospective members, quite possibly turning underserved consumers into some of their most loyal customers.

    Before embarking on any Hispanic outreach, however, FIs must understand the importance of building trust slowly. While product offerings – such as reloadable prepaid cards – are a great start, adding a healthy Hispanic membership base truly is a longer-term effort requiring the support of FI staff and leadership.

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