Mobile payments ideal for young smartphone users

January 12, 2022

Happy asian teenager using smart phone and smiling on sofa living room at home.

Jonathan Kriegel


Fintechs are increasingly targeting Internet-savvy children and teenagers with electronic wallets (eWallets), which allow them to purchase digital and physical goods and services using their smartphones. And given their age and the amount of leisure time at their disposal, it’s no surprise that buying mobile games is likely to be top of their wish lists.

The latest offer comes from Revolut, which has around 16m users worldwide. Last November, the digital bank agreed to let its teenage customers in the UK and Europe make contactless payments using their Apple iPhone or Apple Watch[i]. Revolut Junior is specifically designed for children aged six and 17 but is only available as an extension to their parents’ Revolut personal account.

Revolut Junior should find a ready market amongst young people in the UK. Research published by Statista suggests that 45% of Generation Z consumers (those aged between 10 and 25) in the country made payments with digital or mobile wallets in 2020, ahead of both Millennials aged 26-41 (32%) and Generation Xers aged 42-57 (28%). The UK Payment Markets 2021 report also indicates that initial adoption of mobile payments is being led by younger people aged between 18 and 34, while other reports suggest over a third (35%) of all electronic wallet (eWallet) usage in Europe is initiated by consumers aged between 25 and 34.

Similar trends in the Americas

Nor is the trend limited to the UK and Europe – fintechs in North and South America have also spotted the market opportunity and have been busy rolling out child and teenager-orientated eWallets and digital bank accounts of their own.

In Brazil, Z1 has created a digital wallet specifically for under 18s, for example, and provides a credit or pre-paid card with tight controls on cash limits making sure children cannot rack up high debts. Bradesco’s Banco Next launched a joint digital account for children in August 2020, while fintechs including Inter and C6 Bank are also on-trend. One fintech – Tindin – has gone a step further by creating a digital wallet product designed to educate children in financial management augmented by parental supervision and monitoring.[ii]

Verizon launched its Family Money app last year[iii] in the US – a pre-paid debit card for children aged between eight and seventeen that allows them to make purchases and deposit money in savings accounts. Family Money’s integral pre-paid Visa card is supported by the Metropolitan Commercial Bank and includes a US$5.99 a month fee for up to five children debited from the parent’s accompanying Wallet app. Apple Pay and Google Pay restrict usage for children under the age of 13 in the US. And under current plans, Revolut Junior will additionally be rolled out to minors in the US, Australia, and Singapore at a later date.

Mobile games and eSports popular purchases

What children and teenagers decide to buy using their eWallets is, of course, entirely up to them. Still, parent-imposed spending caps are likely to favor low-value purchases, and games are the obvious candidate.

GWI’s most recent Gaming Playbook report surveyed almost 20000 Internet users who are gamers between the ages of 16 and 64 from 15 countries: Australia, Brazil, Canada, France, Germany, India, Indonesia, Italy, Japan, Mexico, Philippines, Spain, Thailand, UK, and the USA. Over three-quarters (76%) of those surveyed played games on their smartphones, and younger gamers were far more likely to buy microtransactions, DLCs, and season passes.

Almost 30% of the Generation Z and millennial respondents surveyed said they had brought microtransactions in the last year, for example. The figures were even higher for those playing mobile games, largely due to the free-to-play revenue model intrinsic to the most popular smartphone titles and developers.

The difference in preference and purchasing habits between younger and older gamers is far more apparent than in electronic sports (eSports); however – 58% of Gen Z and 61% of Millennials are eSports followers compared to just 38% of Gen X and 19% of Baby Boomers. Over two-thirds (69%) of those who follow eSports across all demographics do so on the smartphone, followed closely by laptops and desktops (66%) but far more popular than television (42%) estimates GWI. The industry generates money from a variety of sources, not only player entry fees but also from the ticketing and merchandising that accompanies large physical and online events.

The ease and convenience of paying for goods and services using smartphones is a big draw for younger people with limited access to credit/debit cards. At the same time, the embedded security controls for children and their parents can offer additional peace of mind. And for many young smartphone owners, mobile games and mobile wallets may just be the perfect partnership.

[i] Revolut banking app lets teens in UK and Europe use Apple Pay, The Guardian, 20th November 2021

[ii] Goodbye piggy banks, hello digital wallets: fintechs target children and teenagers, Latin America Business Stories, 3rd January 2022

[iii] Verizon launches family money app and prepaid debit card for children, Cards International, 16th June 2021

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