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Video-game developers and publishers are beginning to use cobranded, reloadable prepaid cards to help build relationships with consumers who use their products.
Last week, Electronic Arts Inc. announced it is offering the prepaid EA Sports DebitSmart Visa card, which features a rewards system that enables users to redeem points for select EA Sports video games. Redwood, Calif.-based Electronic Arts joins Osaka, Japan-based Capcom Entertainment Inc., which earlier this year introduced its own Visa-branded prepaid rewards card in North America (ADN, 2/27).
Such agreements continue to show the endless opportunities cobranded, open-loop prepaid cards present to companies and to prepaid card issuers and providers, according to Paul Tomasofsky, president of Montvale, N.J.-based Two Sparrows Consulting. "We're just scratching the surface of how prepaid cards can be used in this way," he says.
EA Sports DebitSmart cardholders receive back a percentage of their purchases for every transaction at participating brick-and-mortar and online retailers, such as Macy's Inc. department stores and Netflix Inc.
The percentage the consumer receives varies by retailer and is between 1% to 10%, according to Randy Chase, EA Sports product manager.
Cardholders receive rewards points based on their purchase amount. For example, if a consumer shops at a merchant that provides a 5% reward and spends $100, he receives 500 points, according to Chase.
DebitSmart cardholders receive 100 points per dollar they receive back as a reward. Gamers need 6,500 points for a Microsoft Corp. Xbox 360 or Sony Corp. PlayStation 3 game and 5,500 points for a Nintendo Co. Ltd. Wii game.
"This is a perfect way for gamers to further their relationship with EA Sports and also add to their EA Sports library by doing what they would normally do, and that's make everyday purchases," Chase tells ATM&Debit News.
EA Sports was developing its own card at the time of Capcom's announcement, Chase says. "With how things are [expanding] in the debit and prepaid market, this is a good time to do this," he adds.
EA Sports was searching for ways to give back to its loyal customers, and the prepaid rewards card made the most sense, Chase says. The company believes the card will give users a sense of pride.
"Our fans can put EA Sports in their wallet, and it expresses their love for the brand," Chase says. "It also gives us a way to stay connected with our consumers by supplying them with offers and extending partner incentives."
Gamers can sign up for the card at easportsrewards.com at no charge, and it should arrive by mail within five business days.
Cardholders can load their card accounts at any of the 50,000 Western Union Co. or 50,000 Green Dot Corp. retail store locations using cash, a debit or credit card, or by transferring funds electronically online from an existing bank account.
Cardholders also can reload their accounts via direct deposit.
MetaBank charges cardholders a monthly $1.99 service charge, 50 cents per cash-back transaction at the point of sale and $1 per ATM withdrawal. Online and signature-based purchases at the point of sale are free.
Storm Lake, Iowa-based Metabank issues the cards. I2c Inc. processes the transactions.
StorValue Card Solutions LLC, which helped develop the card's reward system, was intent on creating rewards systems similar to those associated with credit cards, according to Thomas Borzilleri, CEO of the Coconut Creek, Fla.-based company.
"We are striving to expand on a platform, which the credit card industry established many years ago," Borzilleri says.
StorValue partly is targeting the EA Sports DebitSmart card at a demographic that soon may have difficulty securing a credit card. A part of the Credit Card Accountability, Responsibility and Disclosure Act that goes into effect in February requires anyone younger than 21 to have either a legal adult co-sign a credit card application or prove they can handle the debt themselves.
"This particular product is going to give [that demographic] the opportunity to earn rewards they otherwise could be missing out on [from credit cards]," Borzilleri says.
Both Borzilleri and Chase stressed the importance of cardholders being able to earn rewards simply by visiting the local dry cleaners, unlike credit cards, Borzilleri says.
"We have partnered with merchants that are relative to the everyday spending habits of consumers," he adds.
Tomasofsky believes the industry may see other cobranded video game prepaid cards because of their potential to make a profit for issuers and providers. ATM
