The growing adoption of digital payments is also boosting the adoption of prepaid cards among teens and college students globally. Consequently, resulting in innovation in the prepaid card segment for teens. For instance, in July 2021, Financial Literacy FinTech WALO partnered with Finaptic, Banking-as-a-Service Provider in Canada. WALO offers a gamified application that allows parents to teach financial literacy to their kids and has partnered with Finaptic to offer value-added banking products to families. Through this strategic partnership, WALO will be launching prepaid payments cards for teens in the country.
Similar trends are visible in other regions of the world, including Latin America. Z1, a Sao Paulo-based digital bank startup, has built a mobile application for teenagers in Latin America. The mobile application comes with a pre-linked prepaid card allowing teenagers in Brazil to make digital payments. Since its launch, the digital bank has grown 30% per week and 200% per month. In July 2021, FinTech raised US$2.5 million to expand into other Latin American regions, where there is a growing demand for prepaid cards.
In the United Kingdom, GoHenry, the Pocket Money app, provides teenagers with a prepaid debit card controlled and topped up by parents. As of December 2020, the prepaid card is used by more than 1.2 million teenagers in the country. Notably, parents in the United Kingdom paid £98m in pocket money in 2020, whereas teenagers in the country spent just under £100m during the same period. The FinTech solution that turned profitable in March 2020 raised US$40 million in December 2020. GoHenry is planning to use these funds to expand its services in the United Kingdom and the United States.
In India, the adoption of prepaid cards is growing among teenagers as the country continues to shift towards a cashless society. Launched in July 2020, FamPay, India’s first payment app that offers prepaid cards for teenagers, has over two million users driving its growth in the country. The FinTech startup has partnered with IDFC First Bank to launch its prepaid card offerings for teens in the country.