Pocket Money Apps Aim To Help Kids In Cashless World

For kids growing up in today’s cashless society, the piggy bank is going virtual.

Father of two Roland Hall turned to a British startup’s digital pocket money app because his kids were still too young to get bank cards from traditional banks.

With prepaid debit cards linked to the app, Hall’s kids, aged 8 and 10, can spend their allowance and chore money by shopping online or by tapping at contactless payment terminals in stores. Sound like a recipe for splurging? Not so, he said.

“When kids have cash they want to spend it quickly. They want to go to the shops and spend it on rubbish,” said Hall, an IT project manager. But an app lets them check their balances online, “which actually makes them start thinking about saving rather than getting rid of the money,” said Hall, who also prefers giving digital allowances because he never carries cash.

The app, which is called gohenry and expanded to the U.S. in April, is part of a wave of digital money apps combined with prepaid cards for kids as young as six that parents have access to. They are powerful new money management and savings tools that replace old-fashioned piggy banks and account passbooks. Some say they can help enhance financial literacy even as the growth of cashless payments upends traditional notions of money.