The new report finds that teenage payment systems, such as
prepaid plastic cards, are currently provided by only a handful of
suppliers. While the sector is lucrative, Datamonitor says
marketing and advertising to teenage consumers is likely to prove
difficult and operators should look to tie-in with larger
teenage-friendly brands.
The firm found that teenagers in the US and in seven EU
countries last year spent $483 million on-line. It suggests that
this figure will increase to $10.6 billion by 2005, fuelled by the
development of new payment options specifically targeted at
teenagers and general internet growth. Teenagers are among the most
likely groups to pay on the internet. However, their inability to
obtain credit cards and the comparatively small number of sites
accepting payment by debit card has historically made on-line
payment difficult.
Datamonitor argues that e-tailers must integrate new solutions
if they want to target the teen market. It says that, although
teens can make purchases indirectly using a parent's credit cards,
the buying experience is not the same due to the loss of
independence for the teenager.
Prepaid or stored value cards (with the former the money is
stored in an account whereas the latter stores the money on the
card, like an ePurse) allow teens to shop on the internet securely
and without getting into debt. It is this type of product that is
currently growing rapidly, both in use and the number of
competitors in the market.
Datamonitor says that growth over the next five years is likely
to be very different in the US compared to Europe. US teenagers in
general have much more money at their disposal than their European
counterparts. The dominance of the credit card in the US will allow
products connected to parents' credit cards to flourish. However,
Europe will see more independent solutions emerging, with products
developed by independent companies such as Smartcreds and Splash
Plastic, but also from banks.
