Wallets for the new generation

When I was a child (more than twenty years ago), pocket money was my one and only source of reckless spending, aside from skimming small change when mom was asleep (Sorry Mom, I had it on my chest for too many years).

Back then, getting the weekly allowances felt exactly like I was a coal worker waiting in line for his weekly paycheck. My supervisor, AKA my Dad, would make my sister and me queue up in front of a throne-like armchair… shivering with nerves, afraid of how much would be deducted from our paycheck for not doing our chores (or deducted just because he felt like it). We would stand there for ten minutes, during which he would stare at us without saying anything. Then, finally, he’d deliver the verdict:

“You have only dug two buckets of coals! 10 bucks fine!” / “You left the trash for two hours before taking it out when I asked you to! One more dollar for Dad!…” / “50 cents off today! You woke me up from my afternoon nap”.

Once my turn was up I reached out with my small hands as though asking for a donation, nervous and excited to get my small share of well-earned money.

Next, I rushed out and spent it immediately on play cards (PHUGS… MY PRECCCIOUSSSS) at the local store near my school — just like the coal worker spending his weekly earnings in the local pub.

Our lives revolved around our allowances… Piling it up in the piggy-bank or spending it all.

Back then, all of the kids had the early feature phones with hidden costs. We spent tons of our parents’ money on messages, minutes, and ringtones, and occupied our school-days playing “Snake” on our Nokia phones. But that was it.

Technology, and the way we pay for it has evolved since. According to a survey that was published by the Independent, 1 in 4 children under the age of six owns a smartphone in the UK. Certainly more than the number of us fortunate enough to have a flip phone, back in the days.

Teenagers are even luckier: 95% of teens in the USA have access to a smartphone.

How are these kids spending their allowances? In my day, I would buy cards, candies, and the occasional annoying ringtones. Today’s youth have access to an entire digital economy through their smart devices. This new digital age is prompting many parents to reevaluate how they educate their children about money.

Yes, these kids are just as hungry for financial autonomy as I was in my day, and it’s an important step in learning responsibility. But how do we instill a sense of the value of money in a generation that has access to an instant, limitless, virtual shopping experience?

Numerous applications out there claim to be the best family budget management tool. These apps enable you to skip the fanfare and simply allocate funds to your kid digitally, but they only address the issue of accounting.

Some suggest giving the kid a card — but heck, are you really going to trust this unbridled creature with plastic? It’s hard for a kid to grasp the value of the corporeal money behind the card. Besides, younger kids might lose it and cause headaches. Giving an eight-year-old a card? I don’t even trust them with the home-keys.

Are mobile wallets the answer?

After all, they come pre-loaded onto our smart devices. We now live in the age of mobile wallets, and in US and Europe there is an ongoing war between Apple, Google, and Samsung, fighting for consumer adoption and universal acceptance. But these services are not truly “wallets,” as they do not serve the same function. They are just a new form-factor for the cards without a true holding balance, and the ability to properly control kids spend.

In the developed markets real wallets, that hold a native pre-loaded balance and are widely accepted, are nonexistent. However, the true revolution of wallets happened in Asia and Africa, started by such players as GrabPay, Alipay, WeChat, Safaricom and Airtel, and completely skipped Europe and the US. Perhaps companies like Amazon, Uber, Deliveroo, Paypal, or other similar large brands, who already boast large customer bases could develop real wallet capabilities.

Users should be able to load your funds directly in the wallet and simply pay wherever you go. And this vision applies in-store as well as online. You don’t really need to change the hardware — simply scan a QR-code and you’re done.

In an era where every young kid owns a smartphone, the revolution in mobile wallets is on the horizon. These young kids will be the adults of tomorrow and they will lead us to the next decade. And their financial education starts with allowances. Now is the time of change; it can start with them shifting the piggy bank into a digital wallet and affect us all.

Omer Priel, Co-founder and VP of Business Development at Rapyd

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Rapyd

Rapyd lets businesses and consumers pay and be paid however they need. Our FinTech-as-a-service API enables any payment method for local and Xborder commerce.