Growing Up Cashless

Young people are growing up in a world that is, in many ways, more digital than physical. The arcades and movie theaters of a previous generation are now apps, and spending money at those places be tricky for parents. New services are emerging to give young people financial freedom while protecting their parents’ against surprise charges.

The Problem

By now, most people have probably heard a horror story or two on a morning talk show about what can happen when a child unknowingly spends real money, online. It usually goes something like this, “A parent let’s their child use their iPhone to play games and one day their credit card bill arrives with thousands of dollars charged through in-app payments from the game the child was playing.” It sounds absurd, but it is a real problem. Many games are “free-to-play” and then offer the user reasons to spend money through an in-app store to get better items, more in-game opportunities, and so forth.

The key to the issue is that up until now, the credit card of an adult would need to be on file to quickly make these purchases. Once entered, it likely remains in the system to conveniently (or accidentally) be used in the future. What is needed is a payment method that is less open-ended. Something that allows parents the opportunity to teach their children about personal finance and being responsible, without the risk presented by the current system.

A Solution Emerges

Oink is a service which is a bit like PayPal for kids. Parents can put money on their child’s Oink account and then the child can use that at various stores, both digital and physical.

Oink has set up deals with games companies ranging from Habbo to Wargaming, which adds Oink to their list of acceptable payment options. Gap, GameStop, Zappos, Toys R Us and Old Navy also take Oink. Webber said that she is talking to Sony and Microsoft.
Polygon

Parents have other options over the account, including the ability to limit how much can be spent over a given time. For example, you could put $120 on the account on January 1st and then limit the child to a maximum of $10 per month to spend.

Outlook

Over a million Oink accounts have already been set-up and the company thinks this is just a start.

Will Oink and its competitors create a generation so comfortable will digital payments that they won’t want to use cash at all?

Personally, I find cash too inflexible to be of great value. I always seem to be carrying too much or too little and rarely use it. My debit card however, is whatever I want it to be. Taking that one step further, I can’t wait until more places accept payment via mobile devices so that I don’t even have to take my wallet with me when I leave the house.

For a younger generation who are using their mobile devices as their primary way of interacting with society, I think we should expect them to approach payments with the same mindset. This is a generation that will grow up, largely, in a paperless world; so why would paper money make any sense to them?