Russell Simmons' Debit Cards: Capitalism Or Exploitation?

Categories: Pop Life

Rush Card mar30.JPG
Do you know what the last great consumer market is? It isn't iPad users. It's the opposite of your first instinct, people with disposable income.

The last great consumer market, ladies and gentlemen, is the poor. And hip-hop mogul Russell Simmons knows this. He's launching a new pre-paid debit card with Visa called the RushCard. But for what reasons?

The development sparks fireworks of questions about whether Simmons' venture, which carries activation and monthly fees to access your own money, is good for America's unbanked population of 10 million people, according to the FDIC. And they're good questions.

Uju Okasi of the Atlanta Post does a really fair job of exploring these questions about whether the card is good for blacks, which seems to be where it's being marketed. But really, the center of this whole thing is the question whether Simmons, whose product is priced higher than its competition, is really doing this to help his community.

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"I don't know," says Jason Llorenz, a Brooklyn native and attorney who was part of the team that helped billionaire Bob Johnson transition to financial services, specifically supporting communications around the Black Entertainment Television founder's establishment of a hedge fund of funds, private equity fund and purchase of a commercial bank.

"Russell's brand is as both a money maker and community activist," Llorenz says. "I wouldn't discount the motivation of the card to make him money nor his motivation for the card to help the community."

Making money isn't hard for Simmons, who has been quoted as minimizing the art of making money by calling it "pedestrian." So Rocks Off doesn't question Russell's intentions, per se.

For him, making money is easy, but more telling is the fact there are much, much easier ways to make money than trying to convince people who prefer cash to plastic to deposit their money in an intangible safe they can't see or touch.

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6 comments
Lilliancamille
Lilliancamille

This card has been available for a few years...and in all honesty, it's a rip off! You pay everytime you use the card in addition to other fees. People would do better to research banks that offer second chance accounts.

Daz
Daz

You guys act as if it is a ponzy scheme or something. It is a legitimate business. I hope you have the same scrutiny of your banks charging you overdraft fees instead of cancelling transactions. When the money isn't there. Or credit card companies raising your interest rate when they want. If people don't want it they want get it.

Bevoer
Bevoer

I knew some day it would come to this. This will measure the aggregate intelligence of the poor hip-hop demographic. This is the business model: "give me a hundred dollars, and I will give you eighty dollars and a card that says "I'm cool, I'm successful. If I wasn't would I have $20 to waste on this card?"" Sadly, I predict unimaginable success for this product. It's a time-tested business model of "selling cool". $200 dollars for shoes that cost $8 to make and market. The difference is, at least with shoes, the consumer can rationalize that the $192 margin pays for aesthetic or athletic improvement. Here, the consumer is just buying $80 for $100. The charade is abandoned completely. I'd like to think that this won't work, that people are too smart for this. But...

HeatherMella
HeatherMella

Obviously!!!! They pay per transaction!!! Why the hell would a person with credit/ bank account be interested in a prepaid debit card!!??

Apparently you can host your own prepaid debit cards and make .50+ cents per transaction!! Whoohooo in business!!!

(C)rap
(C)rap

Like he doesn't have enough millions already? Pure greed.

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