3 minutes
Pocket Change is a simple mobile wallet that teaches financial responsibility
Whether they're for a latte or a loan payment, financial transactions are quickly going mobile. As online purchases shift from desktop to smartphone, a plethora of options for managing the demand for mobile payments is appearing, but finding the right solutions can be a daunting task for many credit unions.
In the disruptive yet exciting world of mobile payments, e-wallets are becoming more viable each day, and Pocket Change is one start-up that’s adding its voice to the discussion.
A mobile app driven by the idea of digitizing children’s allowance for doing household chores, Pocket Change is still in development, and expected to launch in September, according to founder Myles Binford.
The Pocket Change mobile wallet (watch a video about it) can link to multiple debit cards, credit cards and bank accounts, allowing person-to-person transfers, online purchases, deposits and online payments with one login and one password.
Once the app is linked to a customer's bank accounts and cards, the Pocket Change card (a typical plastic debit card) can be used interchangeably with any account to make in-store or online purchases.
When Binford thought about how rarely he carried cash in his wallet, he realized that a kid-friendly debit card could be convenient, but he also realized the important role it could play in teaching children financial responsibility.
"(It's) an interesting problem. Kids are seeing their parents use cards all the time, but their education isn't really focused on what that means," Binford says. "There's very little education that goes into finance until they're 15 or 16."
Pocket Change's gradient educational platform allows parents to tailor the app to their children’s level of ability. Children can use the app to track progress with grades, good behavior or a chore list.
Once kids are old enough, parents can activate the debit card using the app's on-off toggle switch. Children can set up reminders and watch their allowance grow as they complete their work. Kids can then use their allowance to make online purchases, tracking their spending through the app.
Binford says this gives children a sense of empowerment and responsibility by teaching them to take control of their own finances. By learning to use a debit card early in life, he says, kids can build healthy spending habits and boost their self confidence.
Binford has big aspirations for Pocket Change, but he also faces big hurdles. According to a 2013 CUNA report, despite the fact that smartphone ownership jumped 14 percent in one year, "in the world of payments adoption, the pace has been glacial."
Credit unions' cautious approach and relatively slow adoption of mobile payment software is magnified by competition in the industry. Dozens of companies, such as CU Wallet, Google, PayPal, and Isis are already exploring the mobile wallet market, although no clear leader has emerged.
For many credit unions, slow adoption of mobile apps is a matter of practicality. "We have online banking and mobile bill-pay, but it's all run through our site," says Glenda Collins, marketing director for $34.8 million CSD Credit Union, Kansas City, Mo. "We're a very small credit union, and so honestly an app is just not in our budget. It'll probably just be a couple of years out before we adopt anything like that."
Binford is responding to hesitant CUs, and says that Pocket Change will want to work with credit unions.
“I love credit unions; I use one myself. Some institutions have their own mobile software and programming, and that can be integrated," Binford says. "Our plans are simple. We're going to launch this thing and make it very useable for families. That is the basis of this whole program."
Kait Vosswinkel is a CUES editorial intern.
Photocredit: Myles Binford; PocketChangeCard.com
