Photo of Juliana Garcia Caceres, Alessandra Segatelli, Herbalife and Mel Gargagliano, Bank of America Merrill Lynch.
This company needed a new solution to remove the need to issue cheques in Brazil. They worked with their bank to introduce a prepaid card under the VISA label and are now in the process of consolidating all their daily cash operations to their banking partner.
Juliana Garcia Caceres
Herbalife is an American multinational multi-level marketing corporation that develops, markets and sells nutrition supplements, weight management, sports nutrition and personal care products. The company was founded by entrepreneur Mark Hughes in 1980, and it employs around 7,800 people worldwide.
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Each month in Brazil, Herbalife historically issued more than 10,000 royalty cheques to its 20,000 members. These cheques where expensive for the company to issue and created a high risk of fraud. Also, the use of cheques posed significant operational risk to the company as it took more than 15 days for Herbalife’s members to receive their royalties – sometimes longer if there were issues with addresses. The delay in receiving royalty cheques, unsurprisingly, was the number one complaint received at Herbalife’s call centre.
To overcome these issues, Herbalife looked for alternatives to cheques and collaborated with Bank of America Merrill Lynch (BoAML) to introduce a new cash management solution – a prepaid card under the Visa Label produced by a local company, Brasil Pre Pagos (BPP).
Herbalife’s pilot programme offered one amalgamated solution to enhance the company’s cash management needs in Brazil. To do this its members in the country receive royalty payments through a prepaid card that functions as a debit card.
Instead of waiting for cheques that took more than 15 days, royalties are paid one day before, avoiding delays. This has reduced complaints regarding royalty payments by 66% from 2015 vs 2014. Another benefit of this innovative solution is fraud prevention, as the amount is paid directly by card, using BoAML bank transactions, along with a password for added member protection.