Children and teens are among the heaviest Internet users-a booming community that numbers more than 12 million today and is likely to triple over the next three years. But while kids can e-mail and surf to their heart’s content, the barriers to purchasing merchandise online-most of which requires a credit card for purchase-leaves them precious little they can buy.
But iCanBuy.com, which went online March 19, is among the first to tap into the e-commerce potential of the so-called Clearasil crowd. “We want to set the full foundation for the rest of your life for managing money,” explains Paul Herman, the 30-year-old founder and CEO of San Francisco-based iCanBuy.
Each iCanBuy customer starts with a debit account funded by a parent or grandparent (in its first month online, the average deposit was around $50 and the average purchase was about $25). With parental permission, a child can access his or her money and spend it within preordained limits at any of iCanBuy’s e-commerce partners, which include the likes of software merchant Beyond.com, Justballs and PC Flowers & Gifts. “It’s like when a parent gives their kid 20 bucks to go to the mall,” says Josh Worby, vice president of marketing for Justballs in Kingston, N.J.
Since iCanBuy went online, traffic for the site has been building every week. While the company receives a percentage of every sale generated through its site, it has little allowance money earmarked for marketing expenses. A mention in Yahoo’s daily “What’s New” listings generated some momentum, but the strongest traffic-builder may be word of mouth. “Most teens and kids have about 50 buddies on their buddy list,” says Herman, who hopes to sign up 500,000 customers by year’s end.
With iCanBuy, he adds, kids will be able to see the full range of things they can do with their money. Through its partnership with Atlanta-based Security First Network Bank, the money is federally insured, and children earn 2.57% interest on their savings. Links to other sites teach kids about Social Security and investing wisely, and Herman hopes to add an online brokerage soon. The site even encourages kids to consider donations to child-related charities.
Mindful of critics wary of turning children into shopaholics, the company took the initiative to sit down with representatives of the Federal Trade Commission’s Children’s Advertising Review Unit, which monitors children’s advertising and privacy units.
Although he hopes his new enterprise will put some money in his piggy bank, Herman is sincere when he proclaims that iCanBuy can teach kids that money is not something to be afraid of. “Parents have trouble talking to their kids about two topics-sex and money,” he adds. “We’ll leave the sex talk to Dr. Ruth.”