The Western Union Company (NYSE: WU), a leader in global payment services, is piloting a prepaid card that enables tenants of Moat Housing Association to receive their housing benefit and automatically pay the Registered Social Landlord (RSL).
The trial is part of a scheme to evaluate the role of prepaid cards in supporting automatic rent payments, which would meet many of the challenges RSLs face when implementing Universal Credit. Western Union is currently providing tenants with MasterCard prepaid cards.
The cards allow RSLs to automatically draw money from the tenant's card, preventing rent arrears and giving both tenants and the housing association a record that the rent has been paid. The cards have no credit facilities, so the tenants cannot spend more than the value on the card, once the rent has been paid to the landlord, the cards can be used to pay for goods and services wherever MasterCard is accepted.
Western Union is also investigating the possibility of providing 'jam jar' banking services that enable easier money management to those tenants without a bank account.
"This prepaid card enables tenants and landlords to conduct transactions securely and with minimum fuss", said Fiona Duncan, vice president prepaid EMEA at Western Union. "We have seen a successful start to the programme and look forward to developing our offering in this area, supporting tenants and landlords and helping them work together."
Eusebio Barata, Director of Operations at Moat, said: "We've successfully implemented Western Union prepaid cards with a number of residents for the payment of their Housing Benefit. This has proved to be a positive move for residents, who feel more prepared for Universal Credit and their rent being paid on time. It is also positive for Moat as we are acting early to support residents in paying their rent themselves, to reduce the risk of increasing arrears when the benefit payments change."