Pocket money: the end of piggy banks in the age of mobile applications?

(AFP) – Goodbye coins to buy a snack? Valued in several billion dollars with millions of users in the United States, banking apps for teens are attracting more and more parents and children to France.

Pixpay, Kard, Vybe, Xaalys … start-ups are scrambling to offer bespoke payment cards and mobile applications to seven million French teenagers.

“Traditional banks do not see them as customers but as children of their customers: their applications are implemented but not necessarily adapted,” explains Scott Gordon, co-founder and director of Kard.

These “fintechs” – contraction of finance and technology – start from the same observation: young people are mostly equipped with smartphones, they buy more and more on the internet, especially after childbirth, and parents have less and less cash. .

But they currently only have a few hundred thousand users in France, even though downloads are increasing rapidly.

Their creators, in their thirties or forties, cite their American models: Greenlight and its nine-figure fundraiser that values ​​it around three billion dollars. And his little sister Step, who counts singer Justin Timberlake and influencer Charli D’Amelio among his “business angels” and who has surpassed one million users six months after its creation.

According to them, the problem of France? The weakness of financial education when it is the primary motivation of parents when they start giving pocket money (around 11 years old, according to a Poll & Roll survey carried out for Pixpay at the end of 2020).

“They need tools. It is easier for the teenager to build a budget on the application, follow its evolution. He can easily set aside, create pots for small projects, offer his parents’ to do paid missions, get paid for her first jobs with a RIB, to receive the money for the items she sold online, “abounds Caroline Ménager, co-founder and marketing manager of Pixpay.

Parents have access to accounts, “an advantage for mixed families,” according to Caroline Ménager, and can limit expenses.

– “Financing adolescent sociability” –

Hélène Ducourant, teacher-researcher in sociology at the Gustave Eiffel University, however, tempers the need for parental control and the discourse on the educational virtues of pocket money: “Teenagers decide and money is mainly used to finance their sociability, friendship, fast food, shopping with friends “.

From the first purchases that are echoed in the cashback programs offered by the applications – which re-credit a percentage of the expenditure to the teenager’s account thanks to partnerships with big brands such as Burger King, Starbucks, PlayStation Store or Asos.

These partnerships allow Vybe to finance its card and its application, free of charge but with commissions on certain withdrawals, when the other three players have chosen the subscription, between three and five euros per month.

An economic model that increases the likelihood of being purchased by traditional banks as part of their innovation strategies, according to Hélène Ducourant.

“These are minimal amounts (children receive an average of thirty euros a month, ed) and in France we are still in + cash education +, with a bank account that is used to save and cash that we spend immediately, it’s old-fashioned , but still in the majority even if these new actors will contribute to change it “, underlines the researcher.

Rather than aiming for redemption, Pixpay relies on partnerships with traditional banks to direct over 18s to the one that best suits their needs instead of automatically choosing that of the parent.

More ambitious is Scott Gordon of Kard: “we want to overcome the critical threshold of the majority and support them in student life and then in working life, perhaps with loans, insurance … We also think about cryptocurrencies”. Even if it means becoming a full-fledged neo-bank.

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