Parent-supervised prepaid cards are gaining traction over the last few years, primarily because of the increased smartphone adoption among teenagers. It is estimated that mobile phone penetration among kids in the US by the end of 2017 will reach over 80% – a sharp rise from 65% in 2014.
According to PayNxt360, The USA's teen and campus prepaid card market in terms of transaction value is expected to record a CAGR of 22.7% during 2017-2021 to reach US$ 48,286.5 million by 2021.
US-based fintech startup Current has announced the launch a student account named Current Student Account. The app works with any bank account or credit union. The account is controlled by parents and includes a prepaid Visa prepaid card and mobile app. The accounts can be funded by parents and allow their kids to make purchases at stores and online via the mobile app. The app – which is available in both iOS and Android – enables parents to track and monitor spending, block usage at inappropriate locations such as casinos and bars. Parents can choose to review the chores before transferring or set auto-transfer to conduct transfer at regular intervals. Users can check their account balance, view historical transactions, and gain insights on their spending habits.
The app also features Giving Wallet that encourages families to contribute towards various charity organizations across the US. Additionally, the app works with Facebook Messenger, Kik, iMessage, among other mobile messaging platforms. Current is offering the app on subscription basis at $2 and $3 for one year and two years respectively. Monthly subscription plan is also available at $5. Current however does not charge for funds transfers. The app is currently available for customers in the US. Current is in talks with banks in Australia, Canada, Germany, New Zealand, and the UK.
In February 2017, Atlanta-based startup Greenlight launched prepaid card targeted for kids that also allows parents to set store level controls. For instance, parents can set limit the amount their children can spend at a specific store.
PayNXT360 expects innovative launches to continue over the next eight quarters, targeting students. Among other factors, companies are trying to establish a relationship with students at an early stage through prepaid cards and build loyalty with the brand.
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