Payments

We Serve Unhappily Banked, Interview with Founder of CARD.com

MEDICI

Benjamin Katz is the Co-founder & CEO of CARD.com and is based out of Santa Monica. We talked to him recently to discuss about their solutions and expected trends in the industry.

Q.1) How would you define Card.com in simple terms?

It is a smartphone based alternative to bank branches. It is an effective tool providing online prepaid card solutions. You don't usually find bank branches everywhere and the financial services they provide are costly due to overheads. Card.com enables you to do several things like deposit a check by taking a pic through smartphone, shop wherever Visa debit cards are accepted and also withdraw cash at 23,000 in-network ATMs and more.

Q.2) What is the positioning here - are your prepaid cards for kids whose parents are worried about the spending or is it for unbanked or under-banked?

We primarily target those that are Unhappily banked. A lot of our customers live from paycheck to paycheck. 80% of the money we manage comes directly from employees who depend on their pay-checks. They face critical issues like bouncing of checks and penalties for that. Our online managed cards are quite effective for those who don't want any overdraft fees and late fees. There is no minimum balance requirement as well. If I talk about positioning in terms of customer segment, for us the biggest one is the 25 to 55 year old women.

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Q.3) How do you differentiate yourself from other prepaid card services?

We provide a complete mobile based solution. 90% origination of our prepaid cards takes place through mobile phones, while the remaining 10% through PC/Desktop. Other prepaid cards are usually available in card malls. Our online platform for delivery works great for our customers. Plus, customers get incentivised because we put affinity brands on our cards. Our cards come with brands that showcase Celebrities, TV shows, Cartoons, etc.

There is a P2P feature also where CARD.com cardholders can transfer funds to each other free of charge, any time, anywhere. This P2P feature is quite popular and we witness around 10% of the transactions being transfers among peers.

Q.4) What about customer acquisition? How do you effectively acquire your customers?

We run marketing campaigns on the internet through Facebook and Google ads, relevant websites, prepaid forums, etc. Infact, in the Fintech world we are the biggest and most successful advertiser on Facebook. No other fintech company has been able to use Facebook so effectively.

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Q.5) How do you prevent money laundering and illegal use of the prepaid cards?

Our prepaid cards have high compliance level and are USA Patriot Act compliant. We check parameters like first name, last name, social security number, address and verify the match. We monitor various other parameters during transactions and raise flags. We do make regular checks and so does our partners like Green Dot and others.

Q.6) Are you thinking about global remittances?

We would love to do that but there are regulatory issues and we are seeking the right corridors, the right partnership to fit remittance as a service. Its an exciting space to be in.

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Q.7) How do you stay relevant in the Apple Pay world? Would your cards be supported, tokenized like banks?

I respect Apple a lot. Apple Pay is something we all welcome in the payments industry. It has brought payments industry into limelight again. But I am doubtful about its success. There is a change in the culture of swiping cards that has to be brought about to make contactless payments like Apple Pay happen. Also I am not sure if banks would like to give away so much power to a technology company. For merchants as well getting NFC terminals would be a big step with limited upside. Android phones are much larger in terms of user base in US than iPhones so it poses challenge for the adoption of Apple Pay. I don't think Apple Pay can change much given several limitations.

Our customer segment itself comprises of a large portion of Android users. We are not thinking of doing anything immediately but in 1-2 years timeframe we will bring about app-based contactless payments to our platform.

Q.8) Would you like to share the overall stats for your platform?

This year we witnessed 9 figures in the number of transactions. We did more than well over $100,000,000 in funds loaded along with issuance of 300,000 cards (Patriot Act compliant). We are going to reach 100,000 customers soon. We are witnessing tremendous growth.

MEDICI Team

MEDICI

MEDICI Team is a group of content writers, bloggers, journalists, researchers, and editors from the MEDICI team who collaborate to create FinTech insights.

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