A new company in the United Kingdom last weekannounced it will offer families the opportunity to providechildren as young as eight with a prepaid debit card. PKTMNY, thecompany behind the new card, believes the card will help childrenbecome familiar at an early age with electronic payments and themoney management skills that come along with them.
The PKTMNY card is similar to other cards dedicated to thisdemographic. It enables parents to control many card functions,including where their children can shop, whether they can shoponline and if they are allowed to withdraw cash. The tight securityfunctions extend further; the card is automatically designed toprevent children from purchasing goods and services meant foradults such as alcohol and tobacco.
So while parents can rest easy over the security features of thecard, I question the card’s main objective. Are children at the ageof eight savvy enough consumers to fully understand the financialmanagement lessons that the card is trying to espouse? Prior to thelaunch of the PKTMNY card, similar products like the MeCard andSplash have maintained a minimum age requirement of 13, making thenew card incredibly unique.
“As a parent I know just how difficult it is to teach childrenabout money, especially as the school curriculum focuses on usingcash and visiting banks, neither of which reflect how children seemoney being used,” says Mark Timbrell, PKTMNY founder, in a pressrelease. With Internet penetration over 90% for children between 5and 15 in the UK according to Ofcom, Timbrell believes that thecard provides an important financial management tool where mediumslike the internet have failed to provide to these lessons. “Despitethis (broad internet penetration), children haven’t had access torelevant and safe ways of managing, spending or learning aboutmoney online,” he said. Although the lack of strong financialeducation and awareness is a real problem, speaking from personalexperience and growing up with two younger brothers, children atthe age of eight are not concerned with money management. When mybrothers received their allowances, and they wanted to spend itright away rather than enjoy delayed gratification that accompaniessavings accounts.
While I commend the parents at PKTMNY for their audacious attempt,the fees alone attributed to the card would discourage savings. Thecard requires a £5 ($8) membership fee and a further £1 ($1.6)monthly fee and costs from withdrawing from an ATM range from 50p($.80) in the UK to £2 ($3.2) when withdrawing cost from foreignATMs. While these fees may not amount to much in the great schemeof things, when compared against traditional children savingsaccount offered by the main financial institutions, the benefits ofthe PKTMNY card are isolated to largely its security features asthe big banks can offer more in the way of interest andservices.
All in all, children at eight years old are simply too young forthe lessons that this card is trying to teach. Furthermore, thecard is isolated to what has become a niche market and success willbe minimized. The uphill struggle the PKTMNY card is facing isreinforced by a poll conducted by the Guardian newspaper, whichasked, “Would you give a debit card to an eight-year-old?” and theoverwhelming result answered no.