Pocket money apps for teens in 2023...Understanding what’s in store in the new year

The year 2022 saw digitization cementing its roots further, which in turn continued to   transform its financial industry and saw new-age banking emerging. The velocity of digital banking and contactless payments in  the country ensued a subsequent shift towards wallets, contactless cards, digital payment apps and varied other financial products. Amidst all of this, pocket money apps for teens provided youngsters with a new voice and platforms to manage their own allowances and make real-world decisions, just like their parents- successfully striking a chord with this audience.

2022: the year that amplified awareness around the personal finance needs of India’s teens

Considered unprofitable until they hit the education loan seeking age and hence largely ignored by banks, India’s teens (currently over 200 million) conduct over 80% of their transactions in cash or alternately use their parents cards or digital wallets for digital transactions. GenZ is India's most tech-savvy & a digital first generation. Despite that they have been struggling to find avenues to get financially literate in our country for it is not only left out by the educational curriculum at schools or graduate colleges in India but is a limited topic of discussion within families as well.

Pocket money apps for teens understood this segment’s pulse and came forward to create digital platforms to enable them to learn money management skills through financial products and features available in their app.  Teen oriented wallets come with a pocket money card (credited with specified allowances given by their parents on a occasion based / weekly / monthly basis) giving them access to instant money anywhere, anytime! 2022 witnessed more and more teens steadily figuring out ways of consciously utilising their allowances and learning how to allocate it for their personal spending needs. It has also been a win-win scenario for parents who gave a thumbs up to their children using these apps, as it allows for more discipline and better insights into their spending habits.

While the fintech arena in 2022 saw the recognition of teens as a distinct customer base, 2023 will be oriented towards driving transactions in line with this segment becoming even more independent. Let’s understand how…

In 2022, pocket money apps primarily focused on product innovation & gamification of features to make the experience all encapsulating and engaging for both parents and teens. For example, parents can reward their children on money being saved and even assign chores to incentivise the young users for good habits. Some market players also enabled teens to transfer money among friends. Such features were quickly latched upon by the GenZ consumers who thrive on peer to peer relationships.

The coming year will be adorned with an array of consumer-centric feature enhancements and on-ground market initiatives which will include the following-

• UPI activation by pocket money apps will bolster the adoption rate amongst young users especially at a time when the need of the hour is to further enhance customer experience and provide customer seamless instant options for payment along with enhanced security. Merchants in grocery and retail, food delivery and apparel, among others who experience repeated purchase transactions from teens via pocket money apps will benefit from such a development. 
• Video Know Your Customer (KYC) is a giant leap which will unlock several features that have never before been available to the teenage segment. For parents and teenage children, this is really a convenient mode as it allows them to complete the full KYC process at their convenience from the comfort of their homes. Video KYC will  enable teenage customers to make ATM withdrawals using their cards, enjoy an enhanced transaction limit of INR 100,000 and make peer to peer transactions/wallet transfers. 
• In app solutions including a simple one step phone recharge for teens will make recharging their prepaid phone accounts  convenient, seamless and instant.  
• Pocket money apps are dealing with a user segment which loves to be appreciated, acknowledged and incentivised. The retail brands focussed on teens are expected to offer more and more curated discounts and rewards in partnership with such players in the coming year.
• 2022 saw over 75,000 students from 200 schools from Delhi NCR, Mumbai, Bangalore, Hyderabad, Chennai, and Pune participate in the country’s largest Money Olympiad for Students. Young Indians are inclined towards learning about new-age digital finance solutions which is why more players are expected to launch on ground initiatives involving students to take forward their quest of helping teens test and build on their financial knowledge
• While pocket money apps started with a vision to empower students with both financial independence and help build financial literacy, we believe that there is still a lot to be done to develop financial literacy amongst young Indians. We will potentially see a much more expanded content library and a high level of gamification as well as a renewed focus on in-person learning sessions in schools and residential complexes that is entirely focused on the topic of financial literacy.

Pocket money apps have managed to hit the bullseye by actually acknowledging that today’s teenage consumers are most receptive to communication which is clutter free, easy to grasp, transparent and authentic. The platforms and apps built for this audience have already begun to act as crucial stepping stones in helping teens take ownership of their finances. Seeds have been sown in the way India’s youngsters will handle money matters once they grow up and 2023 will see the space expanding and maturing at a faster pace.