Mobile payments have revolutionised the way that people are handling their financial assets and the transactions are not only convenient but also secure. Although this technology has been embraced by adults, it is equally important to consider the effects that mobile payments have on children. In this article, we are going to uncover the world of mobile payments from a child’s eyes, and see how it affects pocket money and the way children spend it.
The use of mobile payments has been on the rise in recent years. As of 2018, the value of global mobile payment transactions is expected to reach $4.7 trillion. This increase in popularity can be explained by several factors:
- Convenience: Mobile payments make it easier to make purchases without the use of cash or a card, making it possible to make payments within the application.
- Security: Mobile payments are secure than other means of payment since they involve the use of encrypted and authenticated systems to effect the transfer.
- Speed: Mobile payments are faster than other forms of payment and the process of making the payment is rather quick and efficient.
Hence, for children, pocket money is one of the first encounters with money management. It is therefore important to see how mobile payments can change this experience for the better by providing a digital platform on which children can receive and spend their pocket money. Here’s how:
- Digital Wallets for Kids: Some banks and financial technology companies have created digital wallets for children. These wallets enable parents to send pocket money to the child’s wallet and the child can spend the money in the wallet through a mobile application. Kids can then use these digital wallets to make purchases online or in physical stores with the approval of their parents.
- For instance, Greenlight is a digital wallet for kids that has features such as spending limits, savings goals, and educational materials. It helps children to learn how to spend money wisely while giving parents the authority to limit their spending.
- Financial Education: Mobile payment apps can be a great way to introduce children to financial management. With the help of mobile applications, parents can involve children in the process of handling pocket money, which will help to teach them how to save, spend and manage money wisely.
- Apps such as RoosterMoney and goHenry have features that help children learn about savings goals, spending, and rewards for good financial choices. These apps make the process of learning fun, so that children don’t get bored.
A research conducted by the University of Cambridge looked at the impact of mobile payments on children’s financial behaviour. The study comprised of children in year 5 and 6 who were given a digital wallet to help them manage their pocket money.
The results showed the following:
- Financial Knowledge: Children who made payments with mobile money were more likely to know the value of money and the need to plan for it.
- Responsibility: Children also assumed responsibility for their spending because they were able to manage their digital wallets.
- Saving Behaviour: The ability to identify and achieve savings goals helped children to save more effectively.
This case study shows how mobile payments affect children’s financial behaviour and how they can become more financially wise in the future.
There are however some advantages and disadvantages of using mobile payments for children:
- Security and Privacy: It is important for parents to ensure that the mobile payment applications they select for their children have strong security features. It is important to shield the client’s id and financial data from any risk.
- Overspending: When children receive digital wallets, they may want to spend the money since it is easy to do so. Parents should help their children understand the concept of spending money and avoid the child spending more than they should.
- Financial Education: Children can learn a number of financial lessons from mobile payment apps, but it is crucial for parents to talk to their children about money, budgets, and investments.
Mobile payments have changed the way children can afford and manage their pocket money, and thus, equip them with practical knowledge of financial management. Digital wallets and mobile payment applications can assist children in learning about money management, responsibility, and saving. However, it is important that the parents ensure that these apps are secure and that their child learns about financial management from them. With the right direction, mobile payments can assist children in becoming financial experts and secure a bright future for themselves.
