Payment Card News

WAL-MART PHONE CARD

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SUMMARY:
MCI and Wal-Mart have teamed up to offer a cobranded prepaid calling card offering consumers per minute rates as low as 25 cents. (Most prepaid cards carry rates of 33 cents per minute.) Wal-Mart will market the phone card through 2,600 end-cap displays and 28,000 check-out lane POS displays in more than 2,200 locations. The cards are being sold in two denominations: 40 minutes for $9.94 and 80 minutes for $19.84.

FULL STORY:
MCI/Wal-Mart co-branded prepaid cards to be sold at nation’s largest retailer

Wal-Mart Stores, Inc., has introduced a complete line of co-branded prepaid calling cards from MCI and America’s largest retailer. As part of a major sales and distribution agreement announced today, MCI will provide a range of services for MCI/Wal-Mart PrePaid Phonecards that will be sold in Wal-Mart stores across the U.S.

Under the multi-million dollar agreement, MCI is supplying Wal-Mart Stores with prepaid calling cards to be sold in more than 2,200 locations nationwide. As part of the agreement, MCI will provide a complete array of advanced network services including long distance transmission; 24-hour a day, 7 day-a-week multi- lingual customer service, card validation and control systems, interactive platform support and development, consulting and program management. “As America’s leading retailer, Wal-Mart is an ideal outlet for prepaid phone cards,” said Jeff Lindauer, general manager, MCI PrePaid Card Services. “We are pleased to be working with Wal-Mart on the nationwide launch of this new product category as well as providing customers a convenient, economical and reliable way to make long distance phone calls.”

The first Wal-Mart Phonecards went on sale in select participating Wal- Mart Stores earlier this month and are available in two denominations, 40 and 80 minutes. As part of an introductory offer, bonus time will be added to the cards when purchased. Five additional FREE minutes will be added to the 40-minute cards, and customers will receive ten additional FREE minutes on the 80-minute cards, while this offer lasts. Wal-Mart sells the 40- and 80-minute cards for $9.94 and $19.84 respectively, providing customers with long distance calling just under $.25 per domestic minute. Wal-Mart will merchandise the cards on over 2,600 end-cap displays through November and will provide permanent shelf space at more than 28,000 check-out lane point- of-purchase displays in participating Wal-Mart stores nationwide.

“Wal-Mart is pleased to be working with MCI to deliver a low-cost, profitable program for our retailers across the country,” said Lee Scott, vice president of Merchandising, Wal-Mart Stores. “In addition, our shoppers can rely on MCI to back their prepaid cards with the industry’s best customer service and network support.” Wal-Mart stores and MCI have worked on other related prepaid card offerings. SAM’S Club has been successfully marketing the SAM’S Phonecard nationwide since December 1995 and Bud’s Discount Stores began sell)ng phone cards in July.

Point of Sale Swipe Activation Limits Theft

As the prepaid phonecard industry continues to grow, the competition for market share accelerates, and in-store visibility becomes imperative. To combat the threat of theft and inventory shrinkage from on-floor displays, MCI has implemented an industry first, point-of-sale-swipe activation (POSA). Wal-Mart Stores Inc. is one of the first retail customers to implement point-of-sale- swipe activatioN for prepaid cards in their stores. POSA allows retailers to merchandise cards on the sales floor, as opposed to traditional “behind the register” methods, which limits the merchandisability of the cards as well as overall sales of the product. This added security allows customers the opportunity to pick up and inspect the product, while eliminating the merchants’ concern of losing live cards with stored value. Cards are displayed on the sales floor and remain inactive until check-out, at which point, they are run through Wal-Mart’s credit card reader, which communicates with the MCI platform to remotely activate the card.

MCI PrePaid Cards and Calling Features

MCI PrePaid Card users can call from any phone — public or private, touch tone or rotary — in the U.S., to virtually anywhere in the world. The cards are good for domestic long distance calling at any time to anywhere in all 50 states, Puerto Rico and the U.S. Virgin Islands and over 200 countries worldwide. Features available on MCI PrePaid Cards include international origination and termination, rechargeability, one-touch call reorigination, 24-hour customer service, Traveler’s Assist information and referral service, speed dialing and complete turn key merchandising support. Each time the card is used, the number of units remaining is announced before the call is connected.

Popular in Europe since the mid-1970’s and in the Far East since the early ’80’s, prepaid calling cards entered the U.S. market in the early ’90’s. Industry insiders believe their popularity as collectibles in the United States will outpace that of baseball trading cards. Already, some phone cards have sold for as much as $2,000 more than original face value in the collector’s market. Industry insiders predict the U.S. prepaid calling card market will top $1 billion in 1996.

MCI, headquartered in Washington, D.C., is one of the world’s largest and fastest growing diversified communications companies. With annual revenue of more than $15 billion, MCI offers consumers and businesses a broad portfolio of integrated services including long distance, wireless, local, paging, messaging, Internet, information services, outsourcing, and advanced global communications.

Wal-Mart Stores, Inc., operates in all 50 states, Argentina, Canada, Indonesia and Puerto Rico, and in Brazil, China and Mexico under joint- venture agreements. Wal-Mart (WMT) employs more than 670,000 associates in the United States and 30,000 internationally.

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