Russell Simmons on RushCard, Financial Services for Unbanked

Exploring "goal wallet" and an alternative to payday loans

Oct. 13, 2011— -- Hip-hop mogul Russell Simmons says his UniRush LLC company is aimed at an underserved population: people who don't use banks.

In about four weeks, the prepaid credit card company hopes to introduce a new feature called the "Goal Wallet," which will offer a $2 fee rebate to RushCard customers that maintain a balance of $500 or more. The company is also exploring an alternative to the high-priced business of pay day loans.

"We are the anti-bank -- not in negative way," Simmons told "I want to work and build something that is empowering the poor," he said.

Simmons says that the RushCard debit card is utilized by more than one million users and can be purchased for a one-time fee of $3.95 to $14.95. A user can add funds to the card as needed.

The details of the card can be found in a story posted earlier this week.

Simmons says the company's goal is to offer lower-cost alternatives for people who can't or won't use banks. Non-bank access to funds, such as check-cashing stores, can be expensive. According to the Santa Clara School of Law, cashing checks and purchasing money orders can cost an average of $540 a year.

"Our customers are using check-cashing services," said Rob Rosenblatt, the CEO of the RushCard. "They use check cashing because they feel it's necessary and it's our job to educate them because [the Rush Card] is a much more equitable deal."

The $2 fee rebate may be an appealing draw.

"They're in the business of charging money to use their money," says Rosenblatt. They're not in the business of developing a suite of services, including bill pay, that reduces costs for customers, he says.

"Look, banks are not inherently evil. They simply don't have the infrastructure or the cost structure that's required to serve the middle class. Their model is old and they can no longer afford to serve the middle class," Simmons said in a statement.

"Their overhead and branch infrastructure simply make it impractical for them to serve this customer set at a price that these customers can afford. Their problem is compounded by recent regulatory changes that have reduced the fee revenue they collect from merchants every time a customer makes a credit or debit card purchase," he wrote.

The company is also exploring, although nothing is official, the area of pay day loans. Whatever the company's next steps are, Simmons says the main direction is empowerment and he feels most connected to the people participating in Occupy Wall Street.

"I believe in what those people outside my window are doing," Simmons told

"I'm happy to pay more taxes, I'm happy to continue to campaign to get the money out of Washington. I don't want to have an exploitative business, I want to have an empowering business," he continued.