WorldCity Business Magazine

(8-a) Who's Here Profile - NovoPayment "Cashing in on the Unbanked"

by WC

Seventy-five percent of Latin Americas working population, according to World Bank figures, do not have bank accounts, much less credit cards or debit cards. This unbanked population has no credit record of any kind or any formal financial history. Yet, like every one else, they have bills to pay each month water, electricity, telephone, sanitation. For millions of Latin Americans, paying those bills requires carrying wads of cash across town and standing in line at the payment offices. But, for a fast-growing number of low-income consumers, there is finally an easier and safer option: prepaid cards issued by NovoPayment.

Founded less than four years ago in Caracas, NovoPayment is one of the leading prepaid service providers in the region. The company has issued more than 700,000 prepaid cards, accounting for 22 million transactions or $650 million in Venezuela alone. And that is only a tiny fraction of a potential market that company CEO and founder Anabel Perez estimates at $9 billion by 2010 across the region.

To tap into this burgeoning market, Perez moved the company headquarters to Miami, where NovoPayment maintains its dataprocessing, back-office and strategic functions. From here, the company plans to take its prepaid cards to Mexico, Central America, the Andean region and the Caribbean, home to many more millions of unbanked and under-served consumers.

NovoPayment has launched a variety of prepaid cards in Venezuela that do not require a bank account, yet allow users to make purchases at thousands of points of sale, as well as make Internet, phone and SMS payments and transfers. Not only are the cards safer and more convenient, but most importantly, they provide low-income consumers with a formal financial identity and also improved social status. The prepaid card is a tool that can really transform someones life, says Perez.

In addition to the prepaid cards for the unbanked, NovoPayment also issues gift cards for the general public, as well as Electronic Benefit Transfer (EBT) cards that are used by organizations to electronically pay for items such as food benefits and pensions, and cash management cards used by company employees to cover expenses such as per diems, fuel and travel.