Wallit, a personal finance management tool for teens and parents, has launched in the U.S. The Portland, Maine-based company is differentiating its offering from other teen banking startups by involving parents in the savings app, and it’s partnering with banks instead of trying to replace them.
According to CEO Mike Vien, Wallit’s appeal is how it functions as a “two-way street,” allowing parents to save within the app while they help teach their children good personal finance habits. Parents, for example, can set a savings goal for family trips and add funds directly towards goals within the app.
“Parents can use this app to save for goals just as much and as easily as their kids, so it’s monkey see, monkey do,” Vien said. “The companies that are out there on the market are great, but [with Wallit] there’s more controls. This is a different way of approaching the same problem.”
According to the company, Wallit has 20,000 monthly active users. Parents and teens get two separate user experiences. Parents can monitor their teens’ spending habits and set goals, as well as control allowance payments. The company offers cashback rewards for completing financial literacy modules through Wallit’s banking partners.
Rather than create its own debit card and bank account, Wallit is building its personal finance system on top of banks and credit unions’ apps. The company generates revenue from fees it charges banks and credit unions, since Wallit is free for users and doesn’t make money from interchange fees.
Boston-based Radius Bank is a partner bank for Wallit. Though users are linking their accounts to Wallit, Radius will hold the money for specific savings goal envelopes. With Radius, Wallit is hoping to launch new features like sending money to people outside of the family, and Vien said Radius could add Wallit to the bank’s current product suite as well.
Despite its appeal, Wallit faces competition from the startup-developed apps for teens. Greenlight, for example, equips kids with bank accounts, a debit card and opportunities to set savings goals.
Alyson Clarke, principal analyst at Forrester Research, previously told Bank Innovation that incumbent banks that integrate these types of solutions could add pressure to startups. “I’d argue that if and when the larger banks wake up to this market and develop shared finance solutions — like these offerings for parents and teens — disruptors will struggle,” she said.
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