SHARE   |  

Celebrity Paycard Blunders

Celebrity slimPaycards continue to grow as an industry trend, with big financial cohorts like JP Morgan Chase and American Express recently venturing into the space by offering prepaid cards of their own. The paycard expansion doesn’t stop there, however. A number of celebrities have tried (and failed) to use their likeness as a jumping-off point into the financial sector. Because who wouldn’t want to swipe an imprint of a celebrity’s face to pay for that new pair of shoes?

The Wall Street Journal recently reported on this trend, noting that many athletes, musicians and models alike who have endorsed cards have seen them fall by the wayside, even though prepaid card use has increased dramatically in the past few years. Consumers made $132.9 billion worth of prepaid-card purchases in 2013, more than double the amount back in 2009, according to the Wall Street Journal article.

So what separates the paycard success stories from these celebrity flops?

The article points out that these celebrity-driven paycards generally only attract fans of that particular person, whereas prepaid cards offered by an established financial institution tend to bring in a broader audience. Just because someone can dribble a basketball or walk the runway doesn’t mean they can follow suit in selling prepaid cards. And although many of these celebrities likely have more fans than most big banks do today, that alone does not translate into paycard sales.

Celebrities often do not have the infrastructure to back their paycards that big banks tend to have, and because these specialized cards are generally marketed toward low-income consumers, it can be more difficult for celebrities to make a profit without investing a considerable sum of their own money.

There is at least one exception to these celebrity paycard failures, however. Russell Simmons, co-founder of hip-hop label Def Jam and the Phat Farm clothing line, has found a way to make it work. As an early prepaid card endorser, Simmons first issued his RushCard back in 2003, and he said he has learned a lot while continuing to adapt to a new market. And, according to Simmons, that’s the key: adaptation. After a few early problems and complaints about high fees, Simmons has made some changes and his RushCard now has 500,000 active customers.

The article reports that other celebrities have had much less success than Simmons relying on their brand to bring in customers. Apparently, there is more to paycard sales than popularity.

Leave a comment

Your email address will not be published. Required fields are marked *


Sign Up for
Email Updates

featured webinar