Osper, a new mobile-first banking system has launched today, aiming to reinvent the world of money management for under 18s.
The system includes a prepaid debit card and mobile banking app, and aims to not only provide 8-18 year olds with a simple, secure banking service, but also tackle the lack of financial education among young people by encouraging responsibility and good money habits.
The mobile app includes separate log-ins for parents and children, and allows parents to place money on the Mastercard pre-paid debit card so that children can manage their own online purchases and subscriptions for services like Amazon and iTunes, as well as make in-store purchases and withdraw money from ATMs.
“While UK retail banks currently offer debit cards to people aged 11+, data suggests that young people’s needs are not being met by financial services at the moment,” said Alick Varma, founder of Osper. “Despite three quarters of young people having a bank account, less than 30 per cent use online banking and there is a heavy reliance on parents lending cash or their credit cards for purchases with one in five UK children using their parents’ cards in secret.
“There is a need to reinvent banking for young people; they should have the tools to build self-confidence to manage money from a young age.”
Osper includes features like SMS alerts to help monthly budgeting habits and to notify parents of declined transactions due to insufficient funds, and does not include an overdraft facility, so children can only spend the money that has been loaded into the account. The company has raised over $10m (£5.8m) in pre-launch funding, and while the initial launch is for the UK only, hopes to spread to more countries in the future.