Stepping into two unusual places, the eGifting space and the online greeting card market, BillMyParents designed a patent-pending virtual greeting card that multiple users can sign and attach money to.

BillMyParents' main product is the SpendSmart card, a prepaid card targeted towards teenagers that lets parents load money, track transactions and lock amounts to teach responsible spending.

The company wanted to develop a feature that would allow friends and family to create greetings that hold monetary gifts for birthdays, graduation and other events that are important in teenagers and college students' lives, says Mike McCoy, CEO of BillMyParents.

Multiple people can contribute, and as soon as the first contribution is added to the greeting card, the value gets transferred to the recipient's existing SpendSmart card.

"It's a much better experience for someone who already has a SpendSmart card," says Tracy Frommelt, vice president of marketing for BillMyParents. For recipients without an existing BillMyParents card, a new one is made.

Frommelt says the company is working on a hold period, so senders can prevent the contributions from being sent as they come in. This would allow gifters to plan ahead for a specific event, such as a birthday or a holiday.

The product's main benefit is its ability to serve people separated by long distances, says Ben Jackson, senior analyst at Mercator Advisory Group. Plus if the recipient wants a high-cost item, adding many friends and family to the card might garner more pledges and defer the cost.

"These family and friends can share in those experiences through messaging and contributions," McCoy says.

While the service is still new, the majority of people using the greeting cards are parents sending the cards to individuals outside the immediate family.

"BillMyParents has identified a potentially profitable niche," Jackson says. "It sees an opportunity for revenue in the fact that teenagers are active in social networks and comfortable with online buying. It is not hard to imagine that groups of kids would think this is a cool way to give a gift."

But being a niche product also has its disadvantages, Jackson says. Organizing the gift giving across all the recipient's networks might prove difficult for one initial sender. Without access to all of the recipient's friends and family, the initial sender might have trouble tapping into enough participants to make the gift worthwhile.

Also, unless teenagers have their own back accounts or prepaid cards, they'll be unable to contribute money online.

But Jackson says BillMyParents could use the latter disadvantage as a marketing opportunity, hoping that the eGifting feature provides word-of-mouth advertising for the company's SpendSmart prepaid card.

The service could also be used to support charities and fundraisers.

"It has legs beyond the way we initially envisioned it," McCoy says. "It can be used for what's important to teens today; the current generation is very involved in giving back."

Other payment companies have found that facilitating charitable donations can be beneficial to their growth. SCVNGR's LevelUp added a charitable-donation feature last month. It said working with charities provides "a good jump start" for the company. 

Shopkick, a mobile rewards provider that works with Visa and MasterCard, began life as Causeworld, a mobile app designed entirely around charitable donations. Causeworld users would receive rewards for checking in at specific retailers, and could donate their reward points to a charity they chose from a list within the app. 

Whereas quick service retailers, such as Starbucks, Dunkin' Donuts and Pinkberry have all recently developed eGifts tied to a mobile app, BillMyParents is staying online for the time being, taking advantage of the online greeting card market which for the last five years has grown approximately 20% a year, according to research by IBIS World.

"It's clearly a space in the industry that's growing," says McCoy. "You'll see products and programs like this rapidly grow over the next 36 months."

Jackson says the market for such a product may grow in the next three years, but slowly.

With similar features as BillMyParents' product, GroupCard gives multiple people the ability to contribute to a single gift card. InComm, a distributor and innovator of stored-value gift and prepaid cards, acquired GroupCard about two years ago.

SmartyPig LLC, which does business as Social Money Systems, also offers a prepaid product tied to its online savings account. It allows users to make their savings goals public to allow friends and relatives to make contributions.

"I would not expect this to become a huge part of the gift card market because teenagers may not have the ability to contribute to an online payment," Jackson says. "People like to give physical gifts and this is virtual, and getting people organized and agreeing on something can be a difficult task, even online."

But regarding the fundraising opportunities, Jackson adds, "If the platform is opened up and presented as a multiple-contributor funding source, then the users will find other applications for it that we have not yet considered."

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