Westpac offers debit cards to eight-year-olds in youth banking push
By John Collett
As banks seek to sign up the next generation of customers, Westpac has taken a further step towards the cradle by lowering the age for access to debit cards for children to eight years, down from 14.
While the Westpac offering comes with parental controls and purchases of tobacco and alcohol are blocked, will such moves to open accounts to young children help them spend and save wisely?
Westpac will roll out debit cards to children as young as eight in a new push.Credit: Dominic Lorrimer
Chris Brell, acting managing director of cash and transactional banking at Westpac, thinks so. He says lowering the age limit for the debit card for Westpac Choice Youth account holders will enable children to develop important financial literacy skills.
“Our parental controls and safety features will help parents teach their kids about the value of a digital dollar, while keeping them and their money safer,” Brell says.
Westpac says its controls and safety features for account holders under 18 include spending limits, push notifications on account activity to parents, automatic blocks on certain high-risk transactions and for bars, nightclubs, alcohol and tobacco.
“How to keep money secure and spend responsibly is a crucial lesson for children – and parents know how important it is,” Brell says.
Children as young as eight will be eligible for debit cards if they are Westpac customers.Credit: Dominic Lorrimer
Sally Tindall, the director of research at finance comparison website RateCity, says electronic payments are the way of the future, and it is important to equip children with the tools to help them understand and manage their money in an electronic environment.
Among transaction accounts, where the child has a BSB, account number and physical card, Westpac’s move gives it the lowest age for cardholders among Australian banks. CBA’s Smart Access Account for Youth has a minimum age of nine.
The Westpac and CBA offers have spending limits and CBA also has parental controls, while Great Southern Bank’s Everyday Youth Account allows access to a physical card for children as young as 10. It blocks payments for certain transactions.
Most other banks do not have special controls, but limit access to a debit card to children aged between 11 and 14, depending on the bank.
Tindall says parents’ decisions depend on their children’s age and how they want to teach them about the value of money.
She says parents with young children may want to start with coins and notes to get them used to physical money and then make the connection to money held electronically.
“Children see their mum and dad tap at the shop with their phones and buy things online, and they want to do the same thing,” Tindall says.
Among the app-based pre-paid cards for children, Spriggy – which is backed by NAB – allows parents to track their child’s spending and make pocket money payments to their child’s card. Chores can be set by parents and payments made to the child’s card.
Sally Tindall from RateCity says it’s important to equip children with the tools to help them understand and manage their money.Credit: Michael Quelch
CBA’s pre-paid card and app, called Kit, has features and parental controls similar to those of Spriggy, as does another pre-paid card and app, Flexischools.
Pre-paid cards have fees and do not pay interest, but do not carry advertising within the apps, Tindall says.
A survey conducted for Westpac found three-quarters of parents of children aged between eight and 17 are already teaching their children some form of financial digital literacy, and more than half want their children to have a debit card to teach them about money.
Almost three-quarters of parents are happy for their child to have a transaction account and three out of five are happy for them to have a debit card.
However, almost 40 per cent of parents are concerned about online safety and want controls in place, and want oversight on what their children are spending their money on.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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