Times change and with them the habits in a dizzying way; However, certain customs or roots remain among us practically unchanged from the beginning, as is the case with money. Have you ever thought about it? Money in its physical format – whether in coins or bills – has not changed fundamentally since its creation, and there is a paradox that some coins cost what they are worth, that is, that the cost of their materials is higher to the value they represent. And this is where virtual money comes into play; It is not that it is something new, but it is something that the new generations are clinging to in what could be the first step to finally put an end to physical money.
This step is being taken slowly but steadily by the new generation of savers, and we refer to the youngest of all, which starts from 7-8 years onwards. These children (and with them, their parents) have given up the classic piggy bank that is so friendly and familiar to us, and instead opt for digital piggy banks. The advantages are obvious to everyone, and we will explain what they consist of.
The first savings and responsible spending
For young users, these types of virtual piggy banks allow them to see all the money they have on their phone screens and thus encourage potential savings. Applications such as GoHenry and Osper, among others, are growing in volume of users while providing significant benefits to their investors. How do they work exactly? These types of applications are nothing more than the equivalent of a checking account to which a debit card is linked, but with some peculiarities that make it suitable for the market they are targeting.
For starters, the owners are the parents or guardians who, in return, pay a monthly fee for the use of the application. Once the child has been discharged, a debit card linked to this virtual account is given and always under the supervision of the parents who will know at all times how the economy of their small savers is going, and above all, what they dedicate expenses. This transparent relationship of guardianship reassures parents, but much more important than this, it stimulates a certain spirit of saving or responsible spending on the part of the child, who can see how little by little his savings are increasing.
Security, simplicity and control
Why is this type of service a great advance for parents too? On the one hand, they can give them money on a daily basis for their expenses through a couple of touches on their phone, and on the other, they will have permanent supervision over what happens with their expenses and savings. In fact, the greatness of this system lies precisely in the fact that physical money disappears since all transactions, including payments made by minors, are virtual. This makes them much safer tools, since the possibility of theft is eliminated and if the card is lost, parents can block it instantly.
We have commented before that this type of service also stimulates savings but not in the way you think: the Swedish application Gimi allows parents to pay interest for the money saved by their children and thus incentivize them not to spend. But the thing does not end here since this app also contemplates the economic incentive for when the tasks entrusted to the home are done, which can serve as a good revulsive in regards to education.
But beyond the obvious advantages for each other, the elimination of physical money and the commitment to virtual tools for the segment of the younger population is a round business for financial institutions and companies that are dedicated to it. It is an economy that does not stop growing and already generates a huge volume of business: in the United Kingdom alone it is estimated that this market generates a whopping $ 2.2 billion among users between the ages of 13 and 19 .
The other data to which their promoters are firmly seized is also resounding: only 3 percent of children or young people who start with a product of these characteristics decide, later, to change banks. A high fidelity of the user, a buoyant business that generates income from minute one and an increasingly large market projection can you ask for more? Yes, the final end of the coins and bills, or at least they are the exception in the street and not the norm. Going to the cashier is something too old to have to endure in the digital economy do not you think?
The views expressed here belong to the author and do not reflect the beliefs of Digital Trends.