January 28, 2020
Those porcelain painted pigs that children have used for hundreds of years to store and accumulate spare change are going the way of the wooly mammoth—and it has nothing to do with climate change.
As the world moves toward a cashless society, pocket money is going digital, CNN reports. To reflect this trend, a flurry of mobile budgeting apps for children has sprung up worldwide: GoHenry, Osper, and Gimi—to name just a few.
GoHenry, for example, is a debit card and app with unique parental controls that is designed to teach young people (ages 6-19) money management skills. Launched in 2012 in collaboration with Mastercard, the GoHenry app and card now boast a community of over 500,000 members in the United States and United Kingdom.
The app is free the first month; then $3.99 per month going forward. To activate it, parents put money in their own accounts; then, transfer it to their children’s cards.
While, thus far, GoHenry has the biggest chunk of the U.S. market, the other apps are fast gaining popularity, as well.
Not yet in the USA—but already boasting 8 million customers in Europe—London-based Revolut, founded in 2015, claims to have a 10,000-person waitlist in on this side of the pond for its services. Currently targeted at adults, Revolut offers a prepaid debit card, fee-free currency exchange, commission-free stock trading, cryptocurrency exchange and peer-to-peer payments.
And, CNN reports, Revolut is set to join the pocket money market with its upcoming launch of Revolut Youth for seven- to 18-year-olds. Parents who are already Revolut customers will be able to add their children to their account as secondary users, each with their own personal debit card. Parents can monitor the child’s account through their existing app, while kids can download their own child-friendly version. Initial testing has begun, with the dedicated app for kids expected to become available in the United Kingdom in the first quarter of 2020.
The companies behind the apps argue that in an increasingly cashless society, they can offer a valuable way of teaching young children about money.
Two-thirds of adults globally are financially illiterate, according to Standard & Poor’s Global Financial Literacy Survey, and one in four teenagers is unable to make even simple decisions on everyday spending.
Indeed, the growth of digital banking has affected how parents doll out pocket money, with one in three parents in the United Kingdom doing it digitally, according to a recent report by the financial comparison website Money.co.uk.
As a whole, kids aged 13-19, are estimated to contribute £1.7 billion ($2.2 billion) into the UK economy each year, according to the Teenage Finance Report from financial services providers OneFamily.
“There’s a big opportunity,” Aurélien Guichard, the product owner for Revolut Youth, told CNN Business.
Research contact: @CNN