Kid's Credit?

When I saw this, it kind of blew my mind. I can just see the developer's mind working. "Hmm, so we got these kids, eh. And they have money, But no credit card.... What will we ever do? I got it! Kid's credit...Kwedit! Genius! Then we can get their money!"

Kwedit is essentially a credit company for kids. They can easily use this service to buy online games, virtual goods, or other digital content. Kids don't even have to buy pre-paid cards anymore. Now all they need to do is agree to the fee, print out a slip, and take it to their local 7-Eleven store to pay for the fee. This is called, "Kwedit Direct." There is also a feature where you can ask someone else to pay the price for you such as a friend or parent, this is called Pass the Duck.

"Teens can buy prepaid cards for games at the stores now. But in the middle of the night, that doesn’t really help them if they want to make a purchase in an online game so they can join with their friends, said Danny Shader, chief executive of Kwedit and a longtime veteran of the payment industry." I guess it wasn't easy enough buy the pre-paid cards, no they can build up a bill at anytime, without their parents even knowing it.

The idea behind this goes back to an previous post I made. Virtual goods are expected to generate a staggering $1.6 Billion in the U.S. alone this year. What Kwedit is seeing is that teens are being left out of this number, because "95 percent of them pay for goods with cash."

One of the features that is scary to me is the "Kwedit Promise" which allows kids to "play now, pay later." In my opinion this is just asking for problems. The kids will gain debt before they are even in highschool. "Kwedit gives you a Kwedit Score that is a measure of your reliability in making payments. The higher your score, the more you can bill under Kwedit Promise." At least they give some kind of learning experience to the mix, helping kids learn about credit scores.

Kwedit is up and running on 100 popular online sites, and will soon be working on 1,000 online games. This could get big really quick. I am not saying that this is the worst thing in the world, I am just saying that this could be too much convenience for younger consumers. Kids don't have credit cards for a reason, they aren't reliable. It seems as if the market is going for "ease of purchase," while to me they are just trying to get more money.

I'll leave you with this final statement:
"But the good thing is that with virtual goods, the actual loss if someone defaults is zero, as it costs nothing to produce another virtual good."

Quotes and Article from http://games.venturebeat.com/:

Kwedit lets kids use cash to pay for online games, buy virtual goods