Magazine article American Banker

PayJr. to Offer Kids 'Wallet' for Online Shopping

Magazine article American Banker

PayJr. to Offer Kids 'Wallet' for Online Shopping

Article excerpt

An Internet system that lets parents track and reward their children for activities such as completing chores could soon allow young people to make purchases online.

PayJr., which offers the Visa-Buxx debit card for teenagers, plans to roll out a closed-loop version of its service for younger consumers by yearend.

David Jones, the Dallas company's chief executive, said in an interview Wednesday that the "Wallet" program would consist of "direct relationships between PayJr. and various places kids would like to shop," including "major retailers."

The idea is that parents could transfer funds into kids' online accounts and the young shoppers could use the money to make purchases through the Internet. Mr. Jones would not name any of the potential partners.

The goal of the program is to provide kids entering their teen years with a highly supervised means to conduct e-commerce.

"Kids want to spend money online ... and they spend a lot of their time online," Mr. Jones said. "There should be a tool that allows them to make purchases," but "it needs to be heavily regulated by their parents."

According to a 2006 study by the Pew Internet and American Life Project, a Pew Research Center division, 93% of teenagers use the Internet daily.

For banks and other financial companies, creating relationships and loyalty with young consumers is generally more important than earning transaction fees, Mr. Jones said. Three million students graduate from high school each year, but only half of them have bank accounts, he said. …

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