A new Datamonitor report finds that the market for teenage payment cards is set to boom.
In a new report, ‘Online Teen Payments,’ Datamonitor examined teenage online spending across 7 EU countries and the US and found that teenagers spent $483 million online in 2000. This figure is forecast to increase to $10.6 billion by 2005. Teenagers are among the most likely groups to pay on the Internet, however, their inability to obtain credit cards and low online debit acceptance has historically made online payment difficult.
Prepaid or stored value cards (with the former the money is stored in an account, whereas the latter stores the money on the card, like an ePurse) allow teens to shop on the Internet securely and without getting into debt. It is this type of product that is currently growing rapidly, both in use and the number of competitors in the market.
Both traditional players and new entrants have a part to play in this market.
New entrants can attract teens through the ‘cool factor’, while traditional players should use their established role in society as a way to convince parents and to gain their support. If traditional players ignore teenagers they face losing future, profitable customers and they will face an uphill struggle against new, ‘cooler’ brands.
Teenage skepticism about marketing campaigns makes them difficult to target. Marketing cannot be too over the top or childlike, yet the concept must be explicit enough to strike a chord with teenagers. Teens are likely to switch as new products enter the market and become ‘cool’ and cutting edge. One way branding can be used is by creating links with the large brands, for example Coca-Cola, Nike etc.
Although brand loyalty is likely to be low, the importance of a strong, fun, cool image is vital. If something is seen as ‘cool’, teens are likely to pass on the word to their friends. This can be the strongest form of marketing possible. Operators such as Splash Plastic and Visa Buxx have found that when teens like the product, they are quick to pass on the details to their peers.
