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Copyright 2010.
The Green Sheet Inc.
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From coins to customers
A growing consumer group for prepaid cards consist of teens. By virtue of their age, teens have no access to personal bank accounts. That's where prepaid cards come in, giving teens the means to purchase goods and services electronically, whether in-store or online.
One popular pursuit of teens is playing "massively multiplayer online role-playing games" (MMORPGs), such as World of Warcraft and Everquest. Teens buy prepaid game cards to pay for game-time minutes or to outfit their online alter egos with powerful weapons or other accoutrements. Mercator Advisory Group considers the market for digital media (of which game cards are a part) to be one of the fastest growing prepaid card segments. Mercator predicts the load volume in the digital media category will reach nearly $9 billion by 2011.
Coin of the realm
Recognizing the size of the teen market, coin exchange kiosk operator Coinstar Inc. partnered with alternative payment platform provider Rixty Inc. to offer its kiosks as a distribution channel for Rixty's services.
With Rixty game cards or online redemption codes, users go to Rixty's online platform to choose from one of Rixty's 43 MMORPGs, like Dragonica Online and Luminary: Rise of the GoonZu. The partnership with Coinstar allows teens to convert cash and change for receipts on which Rixty redemption codes are printed.
According to Mike Skinner, President of Coin and EPay at Coinstar, the partnership is one step in the Bellevue, Wash., company's continued expansion. "Through the Coin to Card program, Coinstar strives to offer retail cards and certificates that are attractive to multiple audiences," he said.
Skinner noted that the teen audience is increasing its consumption of online entertainment; the Coinstar-Rixty partnership provides teens with another access point to it. Coinstar estimates that $10 billion in loose change is sitting idle in households across the United States, which averages out to more than $90 per household.
Skinner said Coinstar has self-service kiosks in 18,000 locations nationwide and expects to install 800 to 1,000 new kiosks in 2009. Coinstar kiosk users can also exchange cash and coins for gift cards or electronic certificates for retailers such as Amazon.com Inc., Starbucks Coffee Co., JCPenney Co. Inc. and Lowe's Companies Inc.
Winning coin
Skinner said Coinstar has been successful because it offers consumers a convenient way to dispense with leftover change and control over what they purchase through the service.