8/6/2009 11:51:00 AM
Phones 4u enters financial services with top-up debit cards
Phones 4u has launched two pay as you go debit cards, one aimed at the ethnic market and the other at teenagers.
The products form a bid to create a financial services business to support Phones 4u’s core retail operation.
Store managers were briefed on the cards last week, which work by topping up credit to allow users to spend money.
It is being launched in partnership with Mastercard and is aimed at providing cards to consumers with no, or poor, credit histories, particularly migrant workers and teens.
The business is led by former head of 4u airtime (part of John Caudwell’s distribution business) Paul Smith, after it was set up at the start of 2009 by Smith, Phones 4u CEO Tim Whiting and COO Phil Dobson.
One card, called ‘Escape’, will be pitched to migrant workers by offering no fee to transfer money across the world.
The retailer told its store managers it was challenging the dominant force in the money transfer business, Western Union. Staff will get commissions similar to those from high-end pay as you go sales.
Smith (pictured) told Mobile: ‘Migrant workers will be able to load money on the Escape card and transfer money to 28 million locations in the world, or use it in 1.5 million ATMs.’
The card aimed at teenagers is called ‘Neon’. Phones 4u has secured approval from the Financial Services Authority on its suitability for children aged between 13 and 17. Teenagers can sign up, but it will have to be sanctioned by parents online.
A separate company has been created to head up this new business, called Easy Pay Limited. It is a subsidiary of Phones 4u’s parent company, MobileServ, which is owned by private equity firm Providence Equity Partners.
It will operate like a credit card company, taking a merchant’s fee when the cards are used by retailers.