HOW NEOBANKS ARE ADDRESSING GEN Z’S FINANCIAL LITERACY

(EXPLAINING WHY MONETA INVESTED IN JASSBY)

Just like with language skills, money management skills are easier to learn and more effective, the younger you are when you acquire them. Warren Buffet bought his first stock when he was 11 and still felt he could have started earlier. The sooner you start practicing financial activities such as budgeting, spending and saving money, the better it is for your future.

graphical_viewIn the past decade, financial literacy has become a high priority topic in the United States. With a significant percentage of 20 – 24 year-old students declaring bankruptcy, it seems that very few young people understand how cards work. Almost 50% of all high school students failed an annual test in money management given by the government-sponsored Jump$tart, and fewer than 10% understand basic credit card concepts such as how banks calculate interest rates and what an APR [annual percentage rate] is.

If, in the past, the financial activity of kids and teens was dramatically less than that of adults, today, with the rise of online shopping and the shift of buying power from parents to kids, this void in financial literacy among younger kids is no longer an option. About 50 million Generation Zers (around ages 11 to 23), who directly or indirectly spend nearly US $300 billion a year, are keen to learn about finance, and their rate of participation in money management programs and seminars is three times higher than that of their predecessors: Generations Y and X.

Growing up with the Internet at their fingertips, teens and kids do not lack access to information; they lack access to financial services that are tailored to their needs.

Why Teens Even Need Financial Services?

If, 20 years ago, teens would babysit their neighbors’ kids for a few dollars, today, there is an almost unlimited number of ways they can earn money, a lot of money.graphical_view Broadcasting their game on Twitch, being rewarded for their followers on Instagram, or even selling their used stuff on eBay or Facebook – today’s teenager doesn’t need to grow a beard or even hold a driving license to start making money. Not surprisingly, US Generation Zers’ income is estimated at US $100 billion a year, with an extra US $43 billion in allowances they receive from their parents.

Gen Zers become earners – and consumers – at a much younger age than their parents did. With vast smartphone penetration among youngers and the rise of e-commerce websites, for teens, shopping has become much easier and more accessible than ever before. Consequently, a US teenager spends an estimated US $2,600 per year, while influencing another US $5,000 in spending by their parents.

As the economy has become more cashless, kids’ ability to participate in the economy has been reduced. Receiving allowances in cash does not let these kids buy the things they really like, in the place they mainly come into contact with them – online. With limited ways of spending online, most kids still have to use their parents’ credit or debit card to purchase almost everything. For their parents, this is a real hassle – what if the card, or worse, a sticky note with its number written on it, is stolen? How can I control the items my kids are purchasing? How can I keep track of the budget they spend in a month?

So that younger kids can be financially responsible and independent, and so that parents can have peace of mind, kids and teens should run their own account, while enjoying a safe, controlled and fun way of using it.

What Should a Teenager’s Bank Account Look Like?

Many banks are already offering different bank accounts and debit cards for kids and teens. Most of these include a shared account with their parents, who will also top up their debit cards. graphical_viewHowever, traditional banks are gradually losing the young generation, because these kids already have very high expectations from their service providers. Generation Zers expect their banking experience to be no different from their social media experience and they are not afraid to get financial services from tech companies. After all, why would you walk all the way to a bank’s branch to open an account, when you can simply use an email address and fingerprints to open a Venmo or PayPal account? For an 18 year-old who’s been using their Facebook account for over a decade, free of charge, and sharing every moment of their life through it, trusting a tech company makes much more sense than trusting a bank. The names “Capital One” or “Bank of America” have never made any impression on them, and while there are various fintech alternatives, they probably won’t start impressing them now.

This trend has given rise to many financial apps and neobanks for kids and teens, such as Current, Greenlight and Step. Most of them provide younger kids with smart debit cards, topped-up plastic cards that can be limited and controlled by a mobile app. But solutions in the form of plastic cards do not seem to solve the most significant problem – the lack of financial literacy. The cards actually disconnect kids and teens from the reality of “Do I have enough money to spend on this item?”. Many are actually lured into debt and over-spend by the ease of using a card physically, or on-line, which is encouraged by the card providers as well as the merchants.

Jassby took a different road to solve kids’ financial problems. Jassby has created a holistic digital financial ecosystem for kids, teens and their parents, which deals with the real issue of financial literacy. Now, no plastic cards are needed. This is a real bank account for kids that is fully controlled by their parents and lets them use financial services in a very smart way.

Jassby – When eBay And PayPal Are Rebundling

Jassby is a comprehensive financial app for teenagers and their families. As such, it covers the entire range of Earn-Save-Spend habits in a style that is tailored for Generations Z and Alpha. Kids and teens can open an FDIC-insured bank account, receive money from their parents, grandparents and even their employers or income from gigs. They can then split it between saving, investing and spending. Jassby’s app is all about financial literacy and budget control and that’s why it includes “The Jassby Mall,” an in-app shop that includes the most popular brands among kids. Jassby lets kids shop online with the money they’ve earned and buy stuff from retailers that their parents have pre-approved. The Jassby Mall provides the kids/teens with a secure shopping experience which is only one click away from an account where they are planning their budget. By doing so, Jassby has re-established the lost connection between “money that I have” and “money that I spend,” hence solving the unwelcome practice that plastic cards have encouraged, by masking the relation between budget and spending.













The combination of a digital wallet and shopping app provides kids with everything they need in order to be financially independent and start building good habits that connect what they “want” to what they “have.” Just as PayPal enabled eBay’s growth, Jassby’s Wallet and Jassby’s Mall are two complementary parts of the app. While debit cards take the user to the vendors, an “in-app” store like the Jassby Mall brings the vendors to the user, making the experience simpler, faster, safer and much more fun!

Jassby provides new-age users with a “Super-App” that holds their money and lets them bring in new money from various sources and spend it directly from the wallet checkout. The experience of managing a single account for both earnings and spending, without the mediation of any payment service provider, is what makes this app so unique.