General purpose reloadable cards (also called prepaid cards) are a great tool to teach children and teens to manage money smarter before they are eligible for something riskier like a debit or credit card. It’s also a hassle-free option for parents who want one less bank account to manage but still get the tracking that cash doesn’t offer – And that’s one less card you need to worry about overdrafts, late payment fees, interest repayments, and irresponsible spending.
So, what are some considerations for companies considering launching a financial product aimed at kids and teens?
If you want to launch your own prepaid card program with Vasco Pay you will be able to set your own fee structure. This means you can charge or not charge your customers on activities such as card ordering, ATM withdraws or customer-to-customer transfer. You could also choose subscription-style pricing where you charge a monthly or quarterly fee. You certainly have options to create a fee structure that is unique and appealing to parents.
Like both credit and debit cards, prepaid credit cards have a daily limit on ATM withdrawals. Make sure you factor in the end-user in case a customer is a child.
It won’t make sense to have even a $1,000 daily limit as kids are just starting to gain their financial footing. However, a teen may need more, especially if they’re going on an excursion or a trip away from home.
Reloading the card
It’s important to factor in speed and ease of reloading the card so that you have a healthy program and the end-user isn’t stranded without any funds. When looking at the process of reloading, think about ways you can make it more fun. A great place to start is to study up on gamification. Consider things like virtual badges and playful animations when an account is topped up or a balance is checked. The sky is truly the limit in terms of creativity.
Here is where it gets a little more complicated than a traditional general purpose reloadable. Because instead of one end user you have two—the child/teen and the parent. Consider which actions and views into spending make sense for these two very different roles.
Overall, prepaid cards are a safe and convenient alternative to giving a child cash as pocket or emergency money. With Vasco Pay, we’ve made it quicker and more affordable for you to launch a prepaid card program to give youngsters and parents products that give families better ways to manage their money.