Magazine article American Banker

Citi Betting on Brand Strength with Teen Product

Magazine article American Banker

Citi Betting on Brand Strength with Teen Product

Article excerpt

Citibank is hoping to make money where many have failed, with a prepaid card for teenagers.

Citi Cash, a MasterCard issued by the Citigroup Inc. division, arrives on the heels of similar products that are defunct -- American Express Co.'s Cobaltcard and the Visa-branded PocketCard, for instance -- and products from companies called DoughNET and that have gone out of business.

The venture looks like a second example of Citi's pursuing a market where others have found dim prospects. While other banks are pulling away from offering online person-to-person payment, Citi is chugging forward in promoting its c2it p-to-p service.

Citi says that its teen card -- which has "CITI" stretched across its face -- should be differentiated from the flops by the name alone.

"The Citi brand does bring a level of expectation around service, quality, and safety that gives parents a great deal of comfort when we're talking about a product for teenagers," said Gina Doynow, a Citibank vice president and business manager.

It is touted as a "100% paperless product." Cardholders can load funds and monitor the stored value accounts online or by telephone, though phone use is not encouraged.

The idea is to abet and profit from the $155 billion that teens spend each year, Ms. Doynow said.

"There's clearly a need for a good product here to fit their payment behavior," she said. "You can't shop on the Internet without a piece of plastic, and using a prepaid card serves them better than borrowing a credit or debit card from their parents."

But there are reasons why some products have failed, said Rob Leathern, an analyst at Jupiter Media Metrix in New York. …

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