How do parents teach their children to manage money in an age when the use of cash is declining? Two friends had a great idea for a start-up and found a solution in an educational debit card.
By Carolin Lenehan
It has never been easier to spend money. Australia ranks among the highest non-cash transaction users per capital globally, so how will children learn the value of a dollar when expenditure is invisible and all they see is seemingly endless amounts of money available at the magic tap or swipe of a card?
Mario Hasanakos and Alex Badran’s financial education tool, Spriggy, is striking a chord with anxious parents.
Spriggy is a mobile app and prepaid debit card that empowers children to save and spend their own money – with parental limits and guidance to help them make smarter decisions.
Getting the technology right was an 18-month labour of love (and challenges) for Hasanakos and Badran, but the result is something unique.
Spriggy operates in real time, allowing parents to monitor spending, lock the card instantly and add money remotely in the event of an emergency.
“Why don’t your financial products tell you things to achieve life goals?” Mario Hasanakas, Spriggy
Hasanakos explains: “Kids are going to go out and spend money: whether it’s off mum and dad’s credit card or a prepaid card of their own. While cash pocket money is a great tool for learning early numeracy, giving them the responsibility and agency to make spending decisions online by themselves generates a lot of teachable moments – chances for parents to have a conversation with kids about money.”
How Spriggy got started
But this meant tackling new frontiers in Australia: a technology company “whitelabelling” (a product or service that is produced by one company that other companies rebrand to make it appear as if they had made it) and engaging with a wholesale banking provider to incorporate that provider’s licence and deposit-taking capability.
“We’re building banking and payments technologies that haven’t been done before, and doing that in partnership with other institutions,” Hasanakos says.
Spriggy had to be able to grow around legacy regulatory, capital adequacy and technology systems – all of which presented challenges.
“At times, it challenged us to our creative core,” Hasanakos says. “However, we’re coming out the other side. We’re growing as a company and we’ve built a lot of the infrastructure we need.”
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In 2017, the co-founders raised A$2.5 million to expand their team and further build out the product to help more children learn about saving and spending in the digital age.
In May 2018, Spriggy surpassed 100,000 users with 300 joining each day through largely organic acquisition – referrals from existing “mum and dad” users. The business charges an annual membership fee: A$30 per child, per year with a 30-day free trial. The only other fee is a A$10 card replacement charge for lost or stolen cards.
Targeting parents with offspring aged eight to 18 and living at home is a long way from the original 2015 vision for Spriggy. Hasanakos and Badran left their jobs as Citigroup derivatives traders for a placement in a Sydney start-up accelerator to develop and build a digital bank account for millennials, but the basic principle is the same.
“Amazon tells you what books you [might prefer to read] and Netflix recommends movies and TV shows [that could appeal]. Why don’t your financial products tell you the things you need to know to achieve life goals?” Hasanakos asks.
The pair’s “secret sauce” is their understanding of how the family unit approaches a financial problem. It also opens up an entirely new world about how a solution like Spriggy can help solve the stress and anxiety families have with money.
One piece of advice
“Whatever problem you’re dreaming about fixing – no matter how ill-formed it is and how uncertain you are about the risks and the discomfort you might face – start today. If you’re stuttering at the top of the dive platform – going back and forth – just jump.”
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