In a stretch, a Bloomberg headline associated Justin Bieber, ex-addicts and prepaid when the story is really about how the prepaid market is expanding and reviews the different go-to-market strategies by the likes of Bill-my-Parents, American Express, Chase, and Next Step Network LLC.
JPMorgan and American Express are testing whether their sheer size and efficiency can bring greater market share by offering lower fees. Bieber’s partners and other competitors hope to fill smaller market niches and leave the nuts and bolts of the cards to others.
We are leveraging assets, such as our ATM and branch network, that other players in the market don’t have,” Jonathan Wilk, consumer banking product and marketing executive at JPMorgan, said in an interview.
And it isn’t as if Bieber is launching his own product like the Kardashian venture did. Indeed, distancing this from the Kardashian venture was discussed. Bieber is the “brand ambassador” and as such receives compensation, commission on sales, and a healthy stock option:
On Nov. 28, it announced a deal with Bieber in which the pop superstar will be a “brand ambassador” for a similar card, and will produce videos promoting responsible spending by teens. The company will pay the singer an advance, monthly incentive compensation and royalties for each account opened, according to a regulatory filing. Bieber also received warrants to purchase at least two million shares of the San Diego-based firm’s stock.
McCoy said the contrast with the Kardashian venture is that the card is not built around its profitability for Bieber.
“We didn’t dumb down the card or increase the fees to do a deal in the celebrity space,” said McCoy, who left his position as president of credit cards at San Francisco-based Wells Fargo & Co. (WFC) to run BillMyParents.
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