Pointpath Bank, a stored-value card issuer, and Next Estate Communications, a fledgling in the card marketing arena, in early May will debut a stored value card labeled iGEN Mastercard targeted at the teen market.
The re-loadable card, which can be pre-loaded with up to $500 cash or be funded by a parent or guardian’s credit card, is targeted at children under the age of 18 that are not yet authorized to have a credit card.
“We expect that parents may buy the cards as gift cards, but many teens may purchase the cards on their own. There is a tremendous employment rate for 16-, 17- and 18-year-olds and they are heavy consumers,” said Steve Streit, chief executive officer and founder of Next Estate Communications, Pasadena, CA, the company responsible for marketing the cards.
Reference devices for the card will primarily be marketed through point-of-purchase displays checkout counters at undisclosed drug and grocery stores. Consumers can purchase the $3.95 reference device for the card and activate the card online at www.pointpath.com and other yet-to-be-determined partner Web sites. After completing a short questionnaire, the customer will receive an identification number to place purchases online or can request a plastic version of the card that is sent via mail.
“We are focusing on selling the cards at retail centers, because you have to be where the people are,” Streit said. He added that both teens and parents frequent general drug and grocery stores.
“Instead of only originating at the Web, the card originates at store locations and comes to the Web as opposed to some competing teen cards,” said Randy Redmon, business development executive at Pointpath Bank, Columbus, GA, the company responsible for issuing the card and Web development.
Streit said that the card differentiates itself from competing teen cards, such as Visa Buxx and American Express Cobaltcard, because parents must authorize use of those cards, while the iGEN Mastercard can be purchased and completely funded by the teen. “If you have cash in your pocket, you can have your own card,” he added.
Next Estate Communications is planning to market the cards through advertorials on teen-oriented Web sites either linking consumers to a Web site to sign up for the card or to a list of retailers where the reference device can be purchased. Streit added that it is too early in the process to disclose specifics regarding the online marketing campaign.
The company will also market the cards via e-mail to teens, which are expected to rollout regionally with an initial blast of 100,000 e-mails in May. Next Estate will use e-mail lists provided by undisclosed teen Web site partners. A full national e-mail rollout is expected by mid-summer, Streit said, adding that it is too early to disclose numbers.
The card can be used at any offline or online merchant that accepts Mastercard, Streit said, adding that merchandise such as pornographic material cannot be purchased with the card. As an additional safety feature, parents involved in the purchase of the card can limit daily loads, Redmon added.
Next Estate Communications launched roughly two years ago as a Web consultancy company for youth sites and is taking its first step into the financial arena with the launch of the card.
Pointpath Bank initially launched as a full-service online bank targeted at the newlywed market in December 2000. The bank, which also marketed stored-value cards to newlyweds, decided to change its business model shortly after launch. “We realized that we did not want to have to spend hundreds of millions of dollars marketing a bank online and building an infrastructure and instead shifted our focus to the stored-value card,” said Aimee Davis, tk-title at Pointpath Bank. She added that by reducing marketing dollars by selling its cards through other retailers, the company could achieve a faster path to profitability.