Most teenagers are out of school for the summer, but financial literacy should be an ongoing process. Given the state of the economy, it is incumbent on parents to teach their sons and daughters how to manage money. One selling point of prepaid cards to consumers is that they can be used as educational tools.
Money payment specialist Obopay hopes to capitalize on that benefit with its Obopay Family Prepaid MasterCard. Issued by The Bancorp Bank, it is considered a teen card, designed for youth at least 13 years old.
Because it is an open-loop, MasterCard Worldwide-branded card, teens can use it for in-store, online or over-the-phone purchases anywhere MasterCard is accepted.
In addition, money can be loaded onto the card using Obopay's mobile application, text message, mobile Web or via Obopay's Web site.
But Obopay sees the card as more than simply a convenient payment method for teens without access to bank accounts because of what Michael Diamond, Senior Vice President of Product Development at Obopay, calls the card's Family Money capability.
"We're putting what we call a sponsored prepaid card into the hands of 13- to 21-year-olds, and then that prepaid card is linked to a sponsor," he said.
"So, in the case of my two teenage daughters, those cards are tied to my Obopay account. ... I can send them money no matter where they are, no matter where I am, with my mobile phone to their mobile phone."
Therefore, parents can load allowances on the card and monitor their children's spending, since all transactions are revealed on the parents' sponsor accounts.
Diamond said the card is ideal to get money where it needs to go in emergency situations, as well as for more minor inconveniences.
"As an example, I went shopping with one of my daughters a couple of weeks ago, and I forgot my wallet," Diamond said. "And so we're in the check-out line, and we bought $50 worth of something.
"So I quickly sent her $55 with my mobile phone. In a few seconds those funds were available, and she handed over her card with her name on it to the cashier. And we paid for our stuff and moved on."
Diamond said Obopay is driving MasterCard's person-to-person mobile money transfer service in the United States. Obopay has seen interest from prepaid card program providers concerning the card's capabilities.
Within Obopay, the term 'Obolize' has sprung up to define the desire among other providers to incorporate similar features into their services, he said.
The 2008 BCG/PSE Prepaid Study commissioned by MasterCard reports that the "financial inclusion" market - a combination of teen and campus cards - could amount to $40 billion by 2015.
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