Plastic cash generation

August 2007

Young Thais are embracing cash cards that come in colorful design, Young issuers say these cards are more convenient than cash and often packed with lots of discounts.

Will young Thais become the country's first cashless generation? That's the goal of two prepaid cash-card companies, both banking on young people to convince their parents and peers that plastic cash is more convenient than paper.
Young Thais are embracing cash cards that come in colorful design, Young issuers say these cards are more convenient than cash and often packed with lots of discounts.Payment Solutions Company Ltd, which issues the ‘OK Cash’ card, and Thai Smart Card Company Ltd, which distributes ‘Smart Purse’ cards, say their largest group of cardholders are young adults.
‘OK Cash’ is focusing on young consumers aged 15-25. The card provider says 400,000 are now held by its targeted youth group. ‘OK Cash’ cards are accepted where Visa and MasterCard can be used. And ‘Smart Purse’ says half of its cardholders are teens. ‘Smart Purse’ is accepted at 7-Eleven convenience stores nationwide and affiliated businesses.
Prepaid cards are becoming the currency of choice among college students, says young cardholder. "The obvious advantage is convenience, and it's also currently in trend," says University student. "It's cooler to pay with a card than with cash."
Teens are the key to these cards, just as they've been for other technological innovations, including computers and mobile phones.
"Practically every new product starts with teens. They embrace innovation long before it becomes popular with the general public," says General Manager of Payment Solutions. His company has launched different versions and designs of its cards to attract the trend-conscious teen market. "Within the next 10 years, prepaid cards will as common as ATMs are these days," predicts GM.
Thai Smart Card has spent more than 100 million baht on marketing and branding to promote its product. It has hired celebrities to pitch its card in advertisements.
"These cards are part of a global trend. Just like every chapter in human history, peoples' lifestyles change to embrace new technologies," says chief commercial officer of Thai Smart Card.
The card-issuing companies admit there have been glitches during the introductory period. "It takes time to install the hardware and get everything to run smoothly," says GM of Payment Solutions, noting that new mobile-phone services have first only been available in cities before spreading throughout the nation. "We're working hard to get it right. We want it as soon as possible so we can keep increasing the number of cardholders."
Some observers say cash cards will be just a passing fad if their issuers don't provide added value.
"This will be just another short-lived teen trend unless the issuers provide truly satisfying benefits," says Director of the University of Thai Chamber "Teens currently are drawn to the new technology and might even collect cool-looking cards to be trendy. But if the benefits of these cards remain unclear, they'll stop using them," says director, who estimates that discounts of 5-10 per cent would be enough to build a loyal base of card users.