Courtland Walker

“The Tool to Send Your Money”

micash cardNot an hour after Tuesday’s post on an apparent remittance service offered by The Home Depot, I received an email, from their Media Relations Department, in reply to my request for more information.

Here’s what The Home Depot had to say:

“On May 8, 2006, The Home Depot launched a pilot program in Washington, D.C., called MiCash. It is a program offering consumers the opportunity to purchase cards that can be loaded at The Home Depot and used as debit cards, ATM cards, telephone cards for domestic or international calls and as a money transfer product to send money instantly within the U.S. or overseas. Each package purchase includes two identical cards that can be used both domestically and internationally, allowing customers the ability to give one of the cards to a family member. A government ID is required to activate the cards. The pilot will be expanded later in the month to include The Home Depot stores in the Tampa market. There are no plans for further expansion at this time.”

Impressive.

Turns out this internationally usable, all-inclusive, pre-paid Debit/ATM/Remittance/Calling card requires neither a credit check nor a bank account (though it does require a government ID), and money can be added to the card either through “Loading Centers” at participating Home Depot stores, any MiCash Loading Center (searchable online), or via direct deposit by employers. If the user has a bank account and links it to the MiCash card, money can also be transferred online or via the telephone.

The MiCash card is offered in partnership with MiCash Inc., a Washington, D.C. based organization that offers three other MiCash cards, in addition to The Home Depot branded card.

So why The Home Depot specifically?

In response to this question, The Home Depot noted it is “constantly introducing and testing new and innovative products to meet the needs of its various customers.”

The Home Depot acknowledges that the MiCash/Home Depot card was developed with Latin American customers in mind (the poster I saw on the bus was, in fact, completely in Spanish and focused entirely on the remittance angle of the MiCash card), and I think rightly so. (According to the IDB, in 2005, total remittance flows to Latin America passed $53.6 billion, 17% of which are still flowing through “unofficial” channels.) Interestingly though, Home Depot remarked, “A significant percentage of current MiCash users are college students and their parents, and we see a potential opportunity for our servicemen and women stationed overseas.”

Of course, my interest is on the BOP application and in principal, I’m sold. The MiCash system, even without its range of additional features, seems like a very efficient and innovative means to facilitate remittances overseas; an international family-style ATM card that doesn’t require a bank account; Hello BOP. And the fact that its usefulness extends beyond the BOP to additional market segments makes the whole program more financially sustainable.

Still, there’s a lot of interesting food for thought left on the table.

First, beyond customer service, you have to be curious about the strategy angle for The Home Depot, which currently has stores in the United States, Canada, Mexico, Puerto Rico and St. Thomas. The Orange and White has made forays into Latin American countries in the past, with limited success. I have to see this as a potentially very effective means to build brand recognition and customer loyalty (not to mention gather some valuable spending information?) in advance of a renewed push into Latin American countries, and on that note there’s a few thousand other companies that might want to take note. Hello untapped markets.

Second, there’s an apparent and interesting conflict between facilitating remittances, which by their nature are from migrant workers to families abroad, and The Home Depot/MiCash program requiring a government ID to activate the card, effectively knocking out illegal immigrant workers from participating. (Anyone following U.S. immigration reform?)

Third, if you’re requiring government issued IDs to begin with, is it of long-term benefit that customers of the MiCash card aren’t required to open a bank account, with the additional benefits derived there from? Dual ATM card services are already being offered by formal banking institutions, which require a bank account. Personally, I’m of the opinion that bringing anyone into formal financial services who was previously unserved is a good thing, but the issue is open to debate.

Notwithstanding these issues, that The Home Depot has seen fit to throw its MNC and brand-name weight behind the MiCash card, even if it’s only in a pilot program, speaks volumes about how far formal remittances services have come since the early 90’s, when the majority of transfers were made through informal networks.

crop bus posterNextBillion will certainly keep its eye on the success of the pilot program, so stay tuned for updates and let us know what you think. And, of course, if you find yourself on a bus in our nation’s fair capital, keep your eyes peeled for the poster.

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