October 15, 2021

Acqua NYC

Fit And Go Forward

Digital Banking Company Extends Financial Literacy

To teach kids about money, there’s no substitution for learning by doing. That’s the thinking behind Mozper, a debit card and app focused on improving financial literacy in Latin America. As digital options grow in the region and kids’ spending habits move away from cash, Mozper has just closed a funding round in its quest to instill healthy financial habits.

In an interview with PYMNTS, Yael Israeli, co-founder and chief financial officer of Mozper, said that banking services, delivered digitally, are an excellent platform for parents to teach their kids how to save, spend and budget effectively. Israeli noted that Mexico (its initial launch country) is marked by a high adoption rate of mobile devices. The purchase habits among younger demographics have also shifted from cash to online. Those trends have only been heightened and been given a tailwind by the pandemic.

“Kids are not spending money, in cash, because they’re not getting out,” Israeli told PYMNTS.  “So they’ve been spending online — on  Uber Eats, on apps, on gaming (lots of gaming!) and especially Roblox over these past several months.”

Often, that spending occurs on parents’ cards, sometimes without the parents’ knowledge.  You’ve likely heard of mom and dad finding numerous charges — call them microcharges, which can quickly add up  — for, say, digital currencies used in video games (you’ve got to spend real money, after all, to have currency to spend in virtual, fantasy worlds).

That’s become an acute pain point, said Israeli, who noted that “there’s only so much trouble a kid can get into with $10 in his hand, but when you let them be online with access to an adult’s credit card, they can sometimes end up in places that a parent wouldn’t approve of.”

The Mozper card and app, she maintained, give parents a safe way to give their kids a digital form of money, managing spending in a way that promotes financial literacy. In terms of security, she said, the cards can never be used on anything illicit — such as pornography or gambling sites — and those sites are automatically blocked.

“If the parents only want their kids to be able to spend funds, say, on games, or a certain amount on food, that’s something that we give them the flexibility to do,” she said.

Focusing On Financial Inclusion  

The bigger picture is one focused on financial inclusion in Latin America, said Israeli. The relatively recent rise of neobanks and other types of FinTechs has given better access to financial services. But access does not equal financial inclusion, said Israeli — and in Mexico, 70 percent of the population has never had any financial education. The tools on offer, she said, are not used in an optimal way, because there’s a lack of information and education needed on the part of consumers.

Describing the mechanics of Mozper’s debit card and the app, she said, the onboarding process happens with the parent, who signs up for an account with the firm.  Mozper opens a custodial account with its sponsor bank. Parents are able to open sub accounts with their children as part of that custodial account.

Within those sub accounts, she added, the parents can allocate money, tied to specific categories such as spending or savings. The child who wants the newest PlayStation can have a specific goal to save up for that item, and can track their progress (and they learn something about delayed gratification in the process).

“These are ingredients, but the parents need to put together the right recipe for that specific child based on their age level, based on the responsibility level, based on personalities. You can have a 10-year-old that’s spend thrifty or a 10-year-old that’s frugal,” she told PYMNTS.

The company counsels parents that paying for activities such as homework, for example, may not be an optimal strategy, because a child can simply opt to not get paid — and not do the homework.

Financial literacy is a journey, however, and Israeli stated that the intent is to “grow with the customer” and focus on the child’s journey — which will inform future product development. The company recently said that it raised $3.5 million in a seed round for its app and debit card, and its next launch is likely to be in Brazil after certain milestones are met in Mexico.

“We capture the consumer at a young age, but our goal is to really grow with them, offer a demand-driven product and service offering as it becomes relevant in their lives based on what they need,” she told PYMNTS. “By 16 or 17 they might be interested a little more in how to invest.”

By the age of 20, they may be interested in their first loans — and the history of saving and spending with Mozper’s offerings can help create a data-driven credit report that can be especially relevant.

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NEW PYMNTS DATA: HEALTHCARE PAYMENT EXPERIENCE REPORT – JANUARY 2021 

About: The Healthcare Payment Experience Report, a PYMNTS and Rectangle Health collaboration, is based on a census-balanced survey of more than 2,000 consumers’ healthcare payments experiences and the challenges they face. The report reveals key insights into how offering flexible payment options and digital-first experiences can help medical providers keep their patients from seeking healthcare services elsewhere.

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