Back when I was a kid, my parents gave me cash as part of my allowance or whenever I ever needed to make a purchase at the mall. But these days, who uses cash or has it lying around?
For parents today, a company called Greenlight is offering a smart debit card that can be given to their kids, instantly reloaded with funds from a mobile app, and place restrictions around merchants their children can make purchases.
After less than six months in market, the company has already signed up 10,000 paying customers and has attracted $7.5 million in funding from investors that include Relay Ventures, Social Capital, New Enterprise Associates (NEA) and TTV Capital. Greenlight plans to use that funding to expand its team and invest in attracting more customers with its smart debit card.
Greenlight co-founder and CEO Tim Sheehan began working on the startup to solve his own problem — that is, being able to give his kids money to spend when he didn’t have cash on hand. After surveying other parents, he found this problem wasn’t exactly unique, and that parents were also looking for ways to teach their kids financial responsibility while also having a better view of how they were spending money.
With Greenlight parents can give their kids debit cards that provide unprecedented control and transparency into how and where they are used. By combining the cards with a mobile app that provides account information as well as transaction data,
For a low monthly fee, parents can instantly transfer cash to their children’s cards, get alerts when children make purchases, and set store-level controls around where children can make purchases. It also provides easy ways for parents to automatically fund allowances or freeze cards if they’re lost or stolen.
The service is aimed at families that have kids aged 8 through 18. It costs $4.99 per month and includes up to five debit cards per family. It’s easier and in most cases, a cheaper alternative to setting up individual bank accounts for each child, which can come with age restrictions, balance requirements and hidden fees.
Greenlight makes its money off that monthly subscription as well as interchange fees that it makes from all transactions made with a card. But there are no additional ATM or transaction fees for users.