Money apps aim to help kids in cashless world
587 views · Published 18 November 2018 · 1:35 · Indexed 22 September 2026
Channel: AP Archive · 2018 · News & Politics
(12 Nov 2018) For kids growing up in today's cashless society, the piggy bank is going virtual. Parents are turning to a British startup's digital pocket money app when their children are still too young to get their own bank cards from traditional banks. Father Paddy Kelly and his daughter Ailish are going to their local toy store. But once Ailish makes her final choice, it's not Paddy tapping his contactless card on the payment terminal, it's 8-year-old Ailish. Using a prepaid debit card linked to a mobile app, Ailish is able to spend her allowance and chore money by shopping online or by tapping at contactless payment terminals in stores. The app is called Gohenry, one of a wave of digital pocket money apps combined with prepaid cards for kids as young as six that today's parents have access to. They're powerful new money management and savings tools that are replacing old fashioned piggy banks and account passbooks. These startups are part of the broader rise of financial technology, or fintech, startups that can help enhance financial literacy even as the growth of cashless payments upends traditional notions of money. That's especially true in places like Britain, where ubiquitous "contactless" bank cards with built in wireless technology let shoppers merely tap them on payment terminals for small transactions. Global non-cash transactions rose 11.2 percent to 433 billion in 2015 from the year before and are forecast to nearly double by 2020, according to the World Payments Report. Britain along with Canada and Sweden are among the world's most cashless countries, according to a 2017 ranking by currency website ForexBonuses. "Today, cash actually for kids is an abstraction," says Alex Zivoder, the CEO of Gohenry. "Unless parents actually put on the table the cash when they talk about them doing, let's say, a chore at home, cash will remain forever an abstraction. Currently, Gohenry and others, such as Britain's Nimbl and Osper, Australia's Spriggy and Famzoo and Greenlight of the U.S. operate on similar principles. They typically charge a monthly or annual fee for prepaid debit cards. Parents can load money from their bank account and send allowance funds to linked accounts for their kids. Russell Winnard, of charity Young Money, says apps can help parents explain to children how money works. "They are a good useful tool and anything which engages parents and their children in discussions around money is useful," he says. "But what's really important is them understanding where the money that they're spending has come from, and that when they are spending, that money is leaving their account. They no longer have it in their cash part or bank account." Find out more about AP Archive: http://www.aparchive.com/HowWeWork Twitter: https://twitter.com/AP_Archive Facebook: https://www.facebook.com/APArchives Instagram: https://www.instagram.com/APNews/ You can license this story through AP Archive: http://www.aparchive.com/metadata/youtube/4b56d15275c75def52ea73588644d909
