Special thanks to Early to Rise for permission to reprint this article
Smart Card $50 Billion Market --- New Opportunities Daily!
The smart card and prepaid phenomenon is here!
We all know what prepaid means! But I was clueless of the magnitude of this market until I started digging.
In this week’s issue I’ve ripped the curtains back so we can take a look at “Oz” in all of his glory!
The opportunities in the prepaid market are mind boggling. You can tap into some of these opportunities from your desktop over the Internet.
The first step is to identify the opportunity that works best for you.
What the Heck Is the Smart Card and Prepaid Market?
First some background:
The first prepaid or “stored-value” card (or SVC) appeared on the scene in 1992. Even 10 years ago the smart card, store-valued card, and prepaid market was considered a “joke” by most consumers, business owners, and entrepreneurs.
It was likened to infamous “barter bucks” or “barter networks” – which work great on paper but not in reality.
But then something happened…
Stored-Value Cards Skyrocketed to Become a $50 Billion Market!
Today, smart cards, stored-value cards, and prepaid cards are BIG business!
A stored-value card represents money on deposit with an issuer. It’s similar but not identical to a bank debit card. You’ve seen racks of SVCs near the checkout counters at Wal-Mart, Sam’s Club, Home Depot, Rite Aid, and thousands of other retailers. You probably call them gift cards. You might also be familiar with phone cards
SVCs are offered in hundreds of markets including restaurants, movie theatres, home improvement centers, flower shops, online stores, and even airlines, just to name a few!
A major difference between stored-value cards and debit cards is debit cards are typically issued in the name of individual account holders or business, while stored-value cards are usually anonymous.
The term stored-value card does not necessarily mean the funds data (or digital money) is physically stored on the card. In most cases the data is maintained on computers affiliated with the card issuer.
The value associated with the card can be accessed using a magnetic stripe embedded in the card, on which the card number is encoded; using radio-frequency identification (RFID, which is cool stuff too!); or by entering a code number, printed on the card, into a telephone or other numeric keypad.
One of the “insider secrets” in this industry is the fact that people who use smart cards or SVCs almost always spend more than the dollar amount of the card.
What’s more, there’s also a HUGE market of “unused” funds on prepaid and SVC cards.
Here are three popular ways to make money with smart cards, prepaid cards, and SVCs:
1. Resell SVC and prepaid cards as an affiliate (or directly to businesses)
There are hundreds of markets to choose from including prepaid cellular, Internet SVC, restaurants, auto repair shops, computers, and game rentals for systems like Xbox and Nintendo Wii.
I've used TracFone prepaid cellular since 2001, and I love it! Granted, I pay a little extra for each call - but there are NO long-term contracts, monthly bills, roaming charges, hidden fees, secret charges, or cancellation penalties.
If I lose my TracFone or it's stolen, it becomes inactive when the prepaid units run out. On top of that, I can pick up a high-end LG flip phone (super-thin) at Wal-Mart for $29.95, which includes 100 airtime units.
TracFone is the largest prepaid cellular company in North America. And they recently launched an affiliate/partnership program for entrepreneurs. The TracFone program enables entrepreneurs to make a 15-20 percent commission on all TracFone sales. This includes the TracFone, airtime, and accessories!
The largest TracFone reseller averaged more than $30,000 per month in sales in 2009. The figures from 2010 are not in yet!
Entrepreneurs are offering TracFone airtime cards on websites and/or promoting them to their opt-in subscribers. I’ve even seen TracFone affiliates selling products, accessories, and airtime on Google and Yahoo! by using keyword advertisements linked to their affiliate website.
But the infamous “brick-and-mortar approach” seems to be working, too.
Retail shops, airport gift stores, bars, nightclubs, restaurants, and sports venues sell TracFones and prepaid cards on the spot.
Obviously you’re not limited to offering TracFone prepaid cards. There are hundreds of prepaid and SVC markets just waiting for someone like you to take the bull by the horns.
2. Sell prepaid legal, dental, medical, or insurance cards
Unlike the other prepaid opportunities, legal, dental, medical, and insurance may require some physical interaction with your customers - although these are being sold over the Internet too. By "interaction" I mean a direct (person-to-person) sales approach is typically required when marketing these type of cards and services.
For example, you've probably heard about PrePaid Legal Services Inc. Web-savvy entrepreneurs have been promoting PrePaid Legal's services online for years. I like PrePaid Legal's direct sales and marketing strategy. They offer opportunities for entrepreneurs to easily profit in the prepaid legal market.
3. Develop new SVC and prepaid markets - build your own network and empire
Providing a small- or medium-sized business with customized, SVC gift cards is a gigantic market – I’m serious. Business owners will do almost anything to increase revenue - and that's what SVC and prepaid cards do.
Take a local bookstore, for example. You could offer them a package of 50 prepaid gift cards with their logo on them. If it costs you $45 to have the cards imprinted, you could charge the bookstore $95. Your profit would be $50 per order.
The cards are usually a big hit with customers. So the bookstore will come back to YOU for more of them. The continuous backend orders would be even more profitable for you.
Here's another approach….
The bookstore owner can give away prepaid cards you supply with $1 on it to every customer. Most people will return to the bookstore to spend much more than the stored-value on the card, so this is very profitable for them.
This same approach could work with prepaid and SVC cards for gas, home heating fuel, amusement parks, bowling alleys, putt-putt golf, coffee shops, movie theatres, and restaurants, to name a few.
Just sell personalized cards with stored-value to businesses, and they’ll keep coming back to buy more from you. Even a small amount on a card will influence people to come in and shop. They’ll see how often the cards get used – and how their sales go up. All of these markets have substantial repeat business.
And, you could also sell the prepaid POS (point of sale) "swipe" terminals business owners will need to add more stored-value to the cards. A lot of merchants already have POS terminals in place - but not all of them. VeriFone is one of the largest and most reputable POS terminal manufacturers. You can learn all about their products here.
More Ways to Tap Into the SVC and Prepaid Market
- Launch Your Own Prepaid Legal Network
This would be a matter of building a network of attorneys who are willing and able to provide ongoing services for a flat fee.
Don’t have any attorneys in your back pocket?
Most attorneys I know are open to income opportunities. A simple well-written letter to a dozen top attorneys in your area should do it.
You can also check out the Attorney Referral Network. Heck, this is a great resource to have if you never build your own prepaid legal network!
Each "member" that joins the prepaid legal network would pay a monthly fee (it could be assigned to an escrow or separate account) and would be entitled to a predetermined level of legal assistance each year. Every time a member receives legal counsel, a "unit" would be deducted from their account.
Your profit would come from a monthly administration/membership fee and the difference between the attorney's fee and a membership "unit." The attorney's fee could be negotiated.
- Launch a Prepaid Legal Search Engine
A subscribing member would submit his legal problem or question into your "legal search engine." The engine would then instantly provide basic legal guidance on standard issues. If the question required more time to research, or human assistance, the results would be returned within a set period of time.
LegalZoom.com is considered one of the top legal service centers - and for good reason. There are very few sites that are as comprehensive and thorough as LegalZoom.com.
But no single company will control this sector - unless, of course, Google goes into the legal engine business! You could focus on targeted niches like living trusts, wills, copyrights, patents, divorces, or trademark protection.
Google could be one of your sources for legal information, as well as legal documents and forms. Basic legal research can be conducted on Google quite easily.
- Offer Customized "Stored-Value" Gift Cards
The stored-value gift card market is estimated to be worth more than $275 billion, according to Financial Insights.
At colleges and universities, the students consider them to be much "classier" than cheap, handwritten paper gift certificates - and they are much easier to use. You can sell these cards to parents online or directly via snail mail.
The parents can load them up with "stored-value" (credit) for stores like Wal-Mart, 7-Eleven, Target, or Best Buy. To most parents, it makes more sense to give their kids cards with preset limits than regular credit cards.
But that’s not all….
According to the Network Branded Prepaid Card Association, the demand for prepaid and stored value cards is growing like among college students, fans of professional sports teams, business travelers, and music aficionados (mostly for online downloads).
Prepaid kiosks are spreading like wildfire in Asia. There are many variations available on this theme. But Kiosk Information Systems offers prepaid ATM kiosks for sale. These kiosks leverage point-of-sale prepaid purchases for bill paying, online banking, prepaid cards, insurance and many units offer email services. As an entrepreneur you can purchase ATM machines and place them in strategic (high traffic – multi lingual) locations.
So as you can see, the prepaid, smart card and stored-value card revolution is upon us!
This is a market reaping the benefits of a hot rising trend. And so can you.
***** Fast-Start Tip*****
Joining and building a legitimate online affiliate program with major smart card and prepaid “players” like TracFone, AT&T, Verizon Wireless, and PrePaid Legal (to name a few) is the fastest way to start making money in this market.
On top of that, affiliate programs don't require a huge financial commitment either.
Here’s a recap of three top programs:
1. The TracFone opportunity enables you to sell the phone, prepaid services, and accessories on a website or landing page. You can promote these products on Google, Yahoo!, MSN, or ABCSearch.com with keyword advertisements. You can also build a “review” style website which reviews all of the prepaid cell phone companies.
You can become an affiliate with all of the companies, or just TracFone. When visitors click your affiliate link in a review they will be delivered to the company’s website. IF they make a purchase you get paid. You can also promote TracFone products in e-mail newsletters, blogs, discussion lists, YouTube, Facebook, MySpace, on search engines, and other targeted websites. Your affiliate link should be in all of the promotions so you receive commission when a sale is made.
2. PrePaid Legal Services, Inc. is fairly straightforward. Go to their website, learn about the opportunity, and start marketing it on the Internet, via direct mail, or TV.
3. NetSpend –Prepaid Debit Cards. Now you can sell prepaid debit cards on the Internet. It’s as easy as that! PepperjamNetwork manages their affiliate program and you can check out their site for details
But remember you’re not limited to affiliate programs. You can design and sell stored-value cards to thousands of small- to medium-sized businesses. This market is virtually untapped and it’s growing like wildfire!