December 23, 2004
MAPCASH: A NEW WAY TO SEND MONEY
Money transfer business meets competition with first debit card based payment system
The money transferring business is a $150 billion dollar business and is estimated to be growing 20-25% per year. Up to now this industry has been dominated by Western Union and Money Gram. Now a new player has entered the market with an innovative system based on debit cards. MapCash is a New York based company that recently launched their product in October. The MapCash card allows customers to send and receive cash internationally through a network of 3,500 retail cash loading/sending locations and withdraw cash at more than 1 million ATM’s around the world, as well as millions of merchants that accept Visa card payments.
How does it work? When a customer signs up to use MapCash, they receive one card and another is sent to a relative or friend overseas. The card receiver can then use the card to pay for goods and services at Visa accepting merchants, or can withdraw any amount of money on the card whenever they wish from local ATM machines. Registration for a card can either be done on-line or over the phone, 24 hours, 7 days a week. The transaction fee is $13.20, whereas other companies have been known to charge as much as $68 per transaction.
One of the money transferring industry’s biggest problems is fraud, because of how easy it is for places overseas to charge extra unnecessary fees. Due to this problem MapCash has installed a number of anti-fraud and money laundering mechanisms into its offering to assure the efficiency of its transactions. As a safety precaution a maximum balance on the card has been set at $2,500 and a single deposit maximum has been set at $1000. Any transfers made in excess of this amount are red-flagged within the system.
MapCash managed to work out a deal with post offices in more than 70 countries in Latin America, the Caribbean, Africa, and Europe, through its strategic alliance with IGPC, the worlds largest philatelic. Under the arrangement, MapCash are able to redeem cash from their debit cards at government post offices in the IGPC network. Eventually customers will also be able to make deposits at local post offices. At the moment the system is designed for users in the United States to deposit and send money elsewhere, however the company’s founders say that expansion plans that will allow money to be sent from outside the United States are 100% in the works.
Co-founders of MapCash, Chesky Malamud and Eli Popack explain that the card was developed in order to assist the thousands of people who remit funds every month and do not have regular bank accounts or credit cards. “We developed our program to assist the hard working men and women who come to this country in search of a better lifestyle for their families but yet over the years have been gouged by high fees and a system that put their loved ones at risk when they went to retrieve their cash overseas,” explained Malamud.
Should industry competitors be worried? Western Union Director of Corporate Communications for Payment Services, Danielle Pereira, welcomed MapCash to the industry. “We see competition as a good thing that ultimately always benefits the consumers. This is a $151 billion dollar industry and Western Union only shares 14% of that. There is plenty of room for new competitors,” she explained. The other strong competitor in the industry, Money Gram, said it was not prepared to comment yet on the new service that eventually could revolutionize the money-transferring business.