Hitting Up Mom & Dad For Cash Is Just A Click Away
By: As if kids needed another way to hit up their parents for cash, a San Diego company is launching a new payment service called "BillMyParents" to make it easier for kids to shop online.
Socialwise CEO James Collas expects the service to appeal to kids as young as 10 years old, straight through to twentysomethings who are still tied to their parents' purse strings.
The system works through buttons next to items posted on online shopping sites. When selected, they allow kids to email or text a note to their parents about what they would like to buy. Parents then review the request and can approve or reject it. The system's designed to let parents keep their credit card information to themselves.
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According to Harris Interactive, kids spend about $132 billion each year, and about $40 billion of that spending is researched online, but purchased at stores. Why? Teens often don't have access to a credit card to buy the products online themselves.
If successful, BillMyParents could shift a bigger chunk of that cash to e-commerce sites.
Still, the launch does face a few hurdles. First, it comes at a time when teen spending is being crimped by recession-pinched parents and a weak market for teen jobs. The effects of the softer spending have been especially apparent at teen apparel retailers such as Abercrombie & Fitch.
Also, the company has yet to sign up any retail partners, but it is operating a shopping site powered by Amazon.com through that merchant's associate program. The BillMyParents siteessentially opens the door to the entire inventory on Amazon and gives potential retail partners a feel for how the program works.
The company does have a foothold in the world of online social networking and gaming. SocialWise has struck a deal with Artix Entertainment, Habbo, Outspark and RockYou!,among others. The partnership would make it easier for kids who visit those sites purchase virtual goods as part of the online game or social network experience.
As for Socialwise, the company's business model works a lot like Paypal. It gets a commission of anywhere from 3 to 5 percent of the purchase price for each transaction. However, parents also pay a 50-cent fee for every transaction they approve.
"What we're really pitching is the safety and security of the site as a service for the parents," says Collas, who was the former chief technology officer of Gateway.
"This is going to give parents a controlled way to scrutinize their children's spending," Collas says.
But will it pass the Mom test? Granted there is an advantage in finding a way to avoid passing Junior the plastic.
Oh, and what about "BillMyHusband" or "BillMyWife"? Collas has registered many other "BillMy" domains but he doesn't have any plans to veer from the youth demographic at this time. However, the company may expand into offering a debit card that can automatically be loaded with a weekly allowance.
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