Expo Keynote: Johnson Says Prepaid Gives Assist to Underbanked (March 7, 2013)
March 7, 2013
Earvin “Magic” Johnson is no stranger to winning—whether on the basketball court or in the board room. During his Hall-of-Fame career with the Los Angeles Lakers, the NBA legend racked up five championships and three league MVP awards, but his accomplishments as a businessman might be just as impressive. His Magic Johnson Enterprises is a $700 million conglomerate with significant interests in entertainment, retail, food services and real estate. Now, Johnson is shooting to recreate the magic in the prepaid industry. Last year, he partnered with OneWest Bank to launch the Magic Card, a reloadable prepaid MasterCard, and during his conference-closing Wednesday keynote speech at Prepaid Expo USA in Orlando, Fla., Johnson discussed how his experience serving the urban and underbanked community in his previous ventures gives him a deep understanding of the wants and needs of that segment—one of the prepaid industry’s most important markets.
“For 30 years, I’ve been doing business in underserved markets, so I know the unbanked better than anybody,” said Johnson, whose ownership interests in urban-located retail has included a chain of movie theaters and more than 100 Starbucks locations. “The next move for my company was to get into the prepaid business, because these same people I spoke to every day needed help.” That desire to give an assist to the underbanked informs every aspect of the Magic Card, Johnson said. By giving those who haven’t previously had access to financial services a payment card of their own, prepaid can help the underbanked develop confidence, financial literacy and budgeting skills—all of which can then be passed along to their own children.
But while altruism is a major motivating factor in serving the underbanked, there is certainly money to be made in that market segment as well, Johnson said, noting that his urban Starbucks locations—which he sold back to the company in 2010—often brought in higher per-customer revenue than stores located in higher-income areas. “I’m a big believer in [the concept that] you can do well and do good at the same time,” he said.