The emergence of GPR cards that facilitate prepaid cell phone top-ups speaks to a rule of innovation - the adoption of anything beneficial to consumers flourishes when it simultaneously serves to bring profits to suppliers.
If you are the kind of person that can cash flow a month's payment on a cell
phone with a contract, then the value of a top-up could be lost on you. Sprint hits me for $130 on the same day every month. If I had an account at Boost Mobile or Cricket, however, I'd be on a pay-as-you-go kind of plan. If I only had twelve dollars, then I'd paid for exactly that amount of service.
More and more GPR cards now come with online or smart phone technologies that allow the card holder to transfer money from their spend account across to their prepaid phone instantaneously. This is a really good idea. One underlying appeal of any successful under-banked product is immediacy. Waiting is so "banked."
To digress - is it not funny that a regular bank takes advantage of your patience? When you deposit a check, the general rule is that you have to wait at least one or two business days to get access to more than $100. If the bookkeeping allows it, spending that money any sooner can lead to an overdraft or NSF charge. Thus, a person that goes to a traditional bank might be looking at a wait of three or four days between the moment of making a deposit until those minutes are ready and waiting.
With some prepaid accounts, making that transfer when the money is already in an account takes seconds. Moreover, it is possible to speed up delivery of those funds even on money that is still freshly deposited.
Darn Good Business
The truth is that everyone should be selling prepaid minutes. I wish I could sell prepaid minutes.
Anyone can go to the web page of a prepaid cell phone provider and buy minutes at full value. Here's the window to re-boost at Boost Mobile. However, with the exception of only one or two carriers, it is possible to buy wholesale minutes from third-party minute vendors. Here's the thing, though: the cost of a wholesale minute can be substantially discounted. One person told me that his company gets minutes for 50 cents on the dollar. Thus, if you sell those minutes back to the consumer at face value, it is possible to double your money on an investment that is held for virtually no time at all. This is why NetSpend can rebate 5 percent on minutes - they are still clearing an amazing margin.
Still, the consumer is getting some value. This same PM showed me the interface for his top-up program. His software let me pick from ten different carriers in Afghanistan. "That's been a huge market," he said, "because people are buying a lot of minutes for soldiers." Nonetheless, the scroll-down bar continued through most of the countries in the world. I imagine that it could take an awfully long time to clear a check made out to Warid Telecom in Abu Dhabi - even if I was working through HSBC (the world's local bank). But prepaid is all about immediacy. If someone in Dayton wants to help their mother call them from Ulan Bator, then Wells Fargo won't be much help.