Prepaid2Cash, which launched its beta product to the public in April of 2012, is an online service that provides customers an opportunity to literally cash in the assets they have locked away in prepaid cards. Co-founder and CEO Peter Vogt, a veteran of venture capital and private equity, feels Prepaid2Cash represents an exciting opportunity to satisfy an enormous pent-up need representing a market estimated to be worth billions. At its core, the premise of the company’s service is simple: provide a convenient and secure channel providing customers the ability to convert prepaid card balances into cash in hand.
Prepaid cards represent an enormous, if often unappreciated, friction for the public. Between hidden fees, time limits on usage, restricting spending options, and unknown and unused balances, prepaid cards represent a litany of frustrations for the average user. In many instances, people are unaware of how much money they have preloaded on prepaid cards and are unsure of how to even check the balance, much less get cash in hand. To address this problem, a customer will visit the Prepaid2Cash website and set up a secure account. They can take rebate, gift and/or payroll cards and enter them into the system. Currently, Prepaid2Cash offers two options for payment – mailed check or direct deposit. If the customer selects mailed check, Prepaid2Cash will send a physical check to their address in 4-6 business days. Direct deposit transactions result in a cash deposit in 4-5 days. The company takes a small fee for processing and other costs.
The Prepaid2Cash marketing effort targets an addressable segment of the market calculated at ~$25 billion, which represents the proportion of prepaid card holders who are most likely to utilize company services. Prepaid2Cash acquires customers in a purely online format, using a Google adword customer acquisition strategy. Targeted key words, which are constantly measured and refined after ROI and efficacy analysis, drive customers to the company website. Once there, the major challenge is inducing a trial. The design of the site is meant to facilitate registration and trial – the layout focuses on security, ease of use, and convenience of the payout. Security is of particular important, as people are often reticent to enter private information into a new system.
From a marketing perspective, the background analysis work is probably one of the firms’ greatest strengths, as it will set the stage for more sophisticated marketing efforts in the future as Prepaid2Cash scales its business. Utilizing only trackable sources of advertising and marketing allows the Prepaid2Cash team to be flexible and iterative as they update their key word advertising algorithm. The website also encourages customers to invite friends to share the experience and signs up for their own accounts, recognizing the importance of an active and personal referral network to growing an online business. Overall, the company is still in a relatively early stage. However, a robust product and clear value proposition combined with a clean interface and growing marketing strategy will propel the company to success in the near future.