Prepaid debit cards that come with celebrity endorsements over the years have showed little staying power while whipping up storm clouds of controversy.
But despite some shaky endorsements, alliances continue to enter the marketplace.
In November, Rapper Lil Wayne’s music recording label Young Money Entertainment launched a cobranded card with Discover Financial Services (
Champion boxer Manny Pacquiao is behind a Visa-branded prepaid debit card featuring a remittance service that the product’s marketer primarily will promote to Filipinos living in the U.S.
Celebrities might be an effective way to catch the attention of potential prepaid card users and instill trust in financial services, notes Jennifer Tescher, president and chief executive of the Chicago-based Center for Financial Services Innovation.
Tescher warns, however, those celebrities should not go out of their way to violate consumer trust through high fees or confusing product design.
“I actually think these celebrities should have a higher bar in a way,” Tescher tells PaymentsSource. “It’s unfortunate to think they are attempting to transfer people’s trust in them to trust prepaid and then sort of break the promise and then ruin prepaid’s reputation.”
Young Money Entertainment believes it’s doing its best to avoid controversy.
The label wanted to be sure it was offering a credible product before launching the card.
“That was absolutely in the forefront of everyone’s mind,” Tim Clark, CEO of Accent InterMedia Inc., tells PaymentsSource. “This product had to have credible legs and value cardholders could actually use and feel good being a part of.”
Accent manages the card program.
Whether Lil Wayne and other Young Money artists such as Grammy Award-nominated singer Nicki Minaj will convince consumers to buy prepaid products is open to interpretation. Obviously, Young Money believes its star power will help.
“The thing about the Young Money artists is that they are very relevant and leveraging that popularity with financial needs,” Clark says.
Ben Jackson, senior analyst at Mercator Advisory Group, questions whether celebrity endorsements create market success.
“[Success] is going to depend on the target market, the particular endorsement and the real level of involvement from the celebrities,” he says.
Celebrity-endorsed cards are common, and few, if any, have reached widespread use with their intended consumers, Jackson notes.
There are also risks involved.
“The one place I think where they are at greater risk is bringing in kids or young adults who are unsophisticated about financial issues,” Jackson says. “I think they should be careful about disclosures.”
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