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Table of Contents

Lead Story

The ACH, staking new channel claims


Industry Update

Tepid summer for many Gulf Coast merchants

Can the IRS legally attach levies to ISO reserve accounts?

Trade Association News


GS Advisory Board:
Merchant retention, taking the initiative - Part 2

Selling Prepaid

Prepaid in brief

Dynamics of the youth card market

Gift cards: Value multiplier for merchants

Thom Aldredge
World Gift Card


Securing a place for electronic payments

Patti Murphy
The Takoma Group

The allure of end-to-end encryption

Scott Henry
VeriFone Inc.

Uncle Sam might want to pin worker misclassification on you

Sarah Weston
Jaffe, Raitt, Heuer & Weiss PC


Street SmartsSM:
Who will benefit when the Durbin Amendment dust settles?

Ken Musante
Eureka Payments LLC

The importance of PCI DSS compliance

Nicholas Cucci
Network Merchants Inc.

Is there any such thing as loyalty?

Nancy Drexler
SignaPay Ltd.

Need intelligence? Tap the feet on the street

Dale S. Laszig
Castles Technology Co. Ltd.

Succeeding at PCI compliance - Part 3: Implementing the rollout

Dawn M. Martinez
First Data Corp.

Global acquiring and fraud Q&A

Caroline Hometh

Company Profile

Netcom PaySystem

New Products

RDC on the fly

QwikDeposit To Go
Bluepoint Solutions

Multipayment and multimedia at the POS



Nothing fancy needed


10 Years ago in
The Green Sheet


Resource Guide


A Bigger Thing

The Green Sheet Online Edition

July 26, 2010  •  Issue 10:07:02

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Dynamics of the youth card market

As part of its syndicated market research report Cardbeat, Auriemma Consulting Group studied the development of prepaid cards targeted to children and young adults. It concluded that the market for youth cards, also called teen cards, seems poised for substantial growth.

Youth cards, like travel or payroll cards, are part of a large class of general-purpose, reloadable (GPR) cards. The main difference between GPR cards is how and to whom they are marketed. According to Nancy Stahl, Editor of Cardbeat, growth in the youth card market will be gradual but steady, with the speed of adoption driven by how effectively the cards are marketed.

Card issuers and program managers have to "reposition the product in the consumer's mind right now," she said. "There are people who are interested in it. It's just got to get out there more - awareness, familiarity with it, and marketing."

The first word

An online survey of 528 credit cardholders conducted by Cardbeat in April 2010 showed that 64 percent of parents with children between the ages of 10 and 20 were unaware of the youth card. Of the 36 percent who had heard of youth cards, Cardbeat found that the main way parents became informed of them was from other parents. "Word of mouth was definitely the top one," Stahl said.

On the other hand, only 4 percent of respondents heard about the cards from their children. The conclusion is that, while the cards are marketed and targeted to "youth," they should be marketed to parents as well.

"It's parents talking to parents or adults talking to kids," Stahl said. "They buy into it because they're the ones who are going to fund it pretty much and introduce their children to it." Stahl added that youth cards should be positioned as prepaid debit cards. "The younger folks, the younger generations, they are the ones who really gravitate more toward the debit card than the credit card," she said.

"It's almost like a managing finance tool. So that's what issuers would be best to emphasize. It's security as well. It's a fixed amount of money until you add money to it."

Cards with benefits

In its survey Cardbeat asked cardholders the reasons why they would purchase youth cards for their children. The top three answers were:

As for the impact of current legislation on the youth card market, or on the GPR market in general, Scott Strumello, Associate at ACG, doesn't see much of an effect. The Durbin Amendment to The Restoring American Financial Stability Act of 2010 would not affect GPR cards because "they're mainly driven by fee income," not interchange, according to Strumello.

Additionally, provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 mainly target fees and expiration dates on closed-loop gift cards, Strumello said.

Stahl predicts slow but steady growth for GPR cards as consumer awareness of the cards gradually increases in the coming years.

For more stories from SellingPrepaid E-Magazine, as well as breaking news and forums devoted to the prepaid sphere, please visit

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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