Instead of being linked to a personal checking or savings account or operating as means of credit, the Debut Card is prepaid and all transactions are immediately deducted from the card account balance. The Debut Card is reloadable, meaning that customers may add to the card balance when they wish and reuse the card. The Debut Card is also disposable, meaning that customers may discard the card after using the entire balance, and purchase a new card when they need one.
Customers would have the ability to use the Debut Card to withdraw cash from ATM's and to make retail purchases with the ease of a credit card or debit card. In addition, the Debut Card can be sold in a pack of two cards each with its own unique identification number so that customers may give the twin card to a friend, family member, or employee for the purposes of transferring/sharing cash.
Employers would also benefit from the Debut Card, and could issue the Debut Card as a payroll card or use it for expense accounts or emergency expenditure purposes.
Alternatives for loading re-loading the Debut Card with cash value include the ATM network, Split Dialup, Internet Loading, Point of Sale terminals, and postal money orders to Debut Card.
With a participant agreement from various ATM network providers, Debut Card users can make balance inquiries or cash withdrawals at ATM's and point of sale terminals. Precomm. proposes to link the Debut Card with all major participating ATM networks, including the major international links.
Precomm. will be responsible for the backend processing software development and related activities, including Bank “activity report” processing, fee/commission processing, and general ledger accounting processing.
Not everyone wants to set up the necessary bank account to be able to use checks as a payment method, and some are unable to, due to the requirements. *General requirements to establish a checking account include: valid residence street address (not a postal box number) and telephone number
- tax ID, such as a social security number
- two forms of identification
- one year on the job
- minimum balance
- proof of legal age (over 18)
- good credit
Approximately twenty five percent of the United States population does not have a bank account.
Writing checks has become a less popular means of payment due to the time it takes to write the check and the fact that customers must show identification at time of payment. Retailers generally do not accept out-of-state checks, which limits the usefulness of this payment method.
As far as sending checks to provide funds to family, friends, or employees, most banks charge a substantial fee to cash checks for people who do not hold accounts with that institution.
" The average American pays $10.73 per month to maintain a checking account." -- Source, OC Register 3/29/03. Though convenient, debit cards must also be connected to a bank account with available funds. For those who do not have bank accounts and do not wish to establish them for certain reasons, debit cards are not an option.
Credit cards are difficult to obtain because consumers must generally have a job, be a resident, and have good and extensive credit to obtain them. Even when obtained, credit cards are useless once they are maxed out. About 55% of consumers are unable to obtain a credit bankcard or unable to use the card once obtained. In addition, credit cards do not offer a secure or convenient means of transferring funds to friends, family, or employees.
Because money transfers are sent by mail, draft and postal money orders are subject to loss or theft, and the recovery process can take two months.
Draft money orders have a minimum fee of $11 that increases with the amount being sent, in addition to a currency conversion charge that the receiver must pay. The sender must provide the name of a foreign bank and address of a specific branch where the receiver can accept the money order. The relatively high charges and restrictive parameters can be prohibitive for many individuals who find these services necessary.
Postal money orders are cheaper than draft money orders, at $3 for every $500 sent, plus currency conversions. But there is normally a delay of several days while the foreign bank confirms the transaction with the issuing institution.
Western Union and Travelers Express dominate the electronic money transfer segment, and the transfer fee to Mexico using these services is about $15. For transfers from the U.S. to other countries, transfer fees range from $25 to $500, depending on the amount transferred.
Though secure, bank wire transfers are expensive, with fees of approximately $45 plus currency conversion costs. In order to send a bank wire transfer, the sender and recipient must both have bank accounts, which a significant amount of people who need to transfer and receive funds. Competitive Advantages of the Debut Card Compared to its competitors, the Debut Card is obtainable, affordable, secure, convenient, and versatile.
Why Choose the Debut Card:
- More people easily obtain the Debut Card; because it does not require a bank account, credit check, or minimum age.
- The Debut Card is affordable, with most domestic transaction fees priced at less than a dollar. It is a low-cost checking account alternative and money transfer alternative.
- The Debut Card offers security because of its PIN feature, and offers limited liability to the cardholder because loss exposure is equal to the card balance.
- The Debut Card offers the convenience of a swipe card and does not require identification to make purchases. It is disposable and reloadable, so it fits the individual needs of the customer. Transactions are completed in real-time, so there is no wait on the receiving end for transfers.
- The Debut Card offers versatility with a number of functions. It can be used to withdraw cash at nearly 1,000,000 ATM's worldwide and to make purchases at restaurants, convenience stores, retail stores, gas stations, and grocery stores. The Debut Card allows for global money transfer, for payroll card optional services, for transferring balance from card-to-card accounts, and as a budgetary tool.
- The Debut Card offers the ability to perform online banking via the Internet or through touch-tone phones. This phone access is available in multiple languages for the convenience of the customer.
Target Markets
Though Precomm plans to eventually market the Debut Card to all markets because of the versatility and usefulness of the product, our initial plan is to focus on the following specific market segments.
Universal Retail segment The large-scale, universal retail segment refers to the group of consumers who would purchase a Debut Card for its convenience and ease of procurement.
Consumers who currently use credit cards, debit cards, and other methods of payment.
- Travelers or immigrants who need easy access to cash through overseas ATM's.
- "Economically challenged” Retail segment:
Children, teenagers, and college students with parents who want to provide them with a limited source of funds for expenses.
Consumers with bad or limited credit who cannot obtain a credit card, including college students and young adults.
Millions of U.S. consumers who live mainly on a cash basis because they are unable or unwilling to establish bank accounts.
Low-income populations in general.
Business segment
Businesses and organizations could issue and reload Debut Cards for employees instead of payroll checks. Foreign country businesses often pay their labor force on a daily basis in cash, creating administrative and security complications that a GLOBAL CASH payroll service could alleviate.
In addition, businesses could use Debut Cards for expense monitoring and control, Business-to-Business payments, and as a way to provide traveling employees, such as truck drivers, with quick emergency funds.
E-commerce/Internet segment
As a substitute for credit cards, those without credit cards could use the Debut Card to make Internet purchases. In addition, consumers concerned with the security of using a credit card to shop online would be more inclined to use the Debut Card because of its limited liability.
The Hispanic Market Subdivision
The Hispanic segment is the fastest-growing consumer population in the United States, and the needs of this group correspond with the features and benefits offered by the Debut Card.
Money Transfers and ATM access:
- 33% of all Hispanic households send money to family members in their country of origin, at an average amount of $231 per month from each household.
- Mexican immigrants in the U.S. send back approximately $9 billion a year, which makes these transfers the second largest source of foreign income to Mexico after oil.
- ATM's are available in most major cities and resort areas in Mexico.
E-commerce
- The Hispanic household internet penetration rate is estimated to jump from 42% to 68% by 2005.
- “ Credit challenged” and “un-bankable” groups
- The Debut Card provides the same benefits as a credit card without having to have a bank account, proof of nationality, age requirement, or good credit history.
- Credit card ownership by the Hispanic population is less than that of the general U.S. population.
International segment
- As a convenient and secure alternative to traveler’s checks, the Debut Card would enable ATM access and easy purchasing power for travelers in foreign countries.
- E-commerce, payroll services, and ATM access with the Debut Card are especially advantageous options in developing nations without a mature credit card infrastructure
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