Apparently for Justin Bieber, teenage pop-sensation, dominating the pop music charts is not enough.
Instead, his latest gig is putting him head to head with financial giants like JPMorgan Chase & Co. and American Express, as he is entering into the card market to endorse a new prepaid card. The new deal with BillMyParents.com is for a SpendSmart prepaid card aimed at teenagers. The card allows parents to control their teens’ spending, receive notifications of where it is used, and blocking usage at places like liquor stores.
The lucrative prepaid market holds myriad revenue opportunities by attracting underbanked segments (eg. teenagers), and has fewer market regulations, drawing in niche players to compete with financial incumbents. Consumers choose prepaid cards to limit their spending, to avoid fees on checking accounts, or if they do not qualify for checking accounts due to poor credit.
However, prepaid card users should be aware of the many hidden fees that come with prepaid card usage. Bieber’s card has fees that are comparably higher than others in the market. For example, the monthly fee for the card is $3.95, withdrawing from an ATM costs $1.50, and if the card is not used for 90 days, the charge is $3.
Bieber is not the first celebrity to enter the cards market. He is following the footsteps of the Kardashians and Suze Orman, ventures which respectively failed and received negative criticism. While the card has not yet been launched, only time will tell whether Bieber's star power will be strong enough to extend into the payments arena.