Gen Z is aging into spending power—and some financial services are starting to target them as teens. From applying for their own credits to receiving standard financial advice, these new services are digitizing solutions for their money issues…
The oldest edge of Gen Z is entering adulthood, which means their spending power is about to increase—as is their use of financial services. YPulse found that Gen Z’s top financial goals right now are to save money, earn money, and find a job—and our research also found that 25% of 13-19-year-olds are paying monthly bills. Financial advice has even been trending on the online platforms where Gen spends most of their time: In the last year, TikTokers have been seeking out advice from financial advisors on the app. They’re beginning to build their personal finances, and finance brands are starting to pay attention. Now, new financial services want to specifically target Gen Z to help them manage their finances or give out financial advice. Here are four building digital solutions made for next gen consumers:
Launched at the end of 2020, this mobile service specifically targets 13-18-year-olds by offering them an FDIC-insured bank account without fees as well as a secured Visa card that helps them establish credit before they’re adults. And since they serve as a P2P platform, users can also send money to their friends. At the end of last year, Step announced that it raised $50 million in funding after reaching over 500K users in just two months following their official launch. During that round of funding, the company added some celebrity investors including The Chainsmokers, Justin Timberlake, and Gen Z star Charli D’Amelio. They also recently teamed up with the TikTok celeb to “promote the product and talk about financial literacy” across her social channels.
“Buy Now, Pay Later” services have taken off among young consumers in the last year, and YPulse’s research found that 22% of 13-39-year-olds have used BNPL payment installment services already, and 29% are interested in using them. London-based fintech company Zilch is getting into the game with a new “responsible,” handy alternative to BNPL. Earlier this year, the firm launched what they dub “an American Express [card] for Millennials and Gen Z,” which offers users a personalized credit line which is paid back in installments. If they succeed, it could “eat into the profits of both BNPL and traditional credit cards.” The service is launching an app (their site says it’s “coming to an app store near you”) which could put them in the company of Venmo and Cashapp in terms of mobile payments as well.
Over half of Gen Z and Millennials tell YPulse they wish their parents taught them more about managing finances, so starting to learn digital spending skills at a young age could be a positive. And in a move to teach young people about financial management early on in life, Europe-based budgeting apps like GoHenry, Osper, and Gimi have been trying to offer money management services for kids and teens, and include a monthly subscription fee, parents can add money to their kids’ accounts, set limits, or monitor payments. Earlier this year, e-banking app Revolut launched Revolut Junior, a financial service for 7-to-17-years-olds, with permissions that. can be set by the parent/guardian, so the app’s functionality can grow as the child grows. The premium version of the app includes educational tools, and parents can additionally set rewards for chores and give their children $1 every time they do something like clean their room, or 50 cents when they set the table. Their kids can also set saving targets for products they want and check their progress in the “Goal” section. Kids who don’t have a smartphone or access to one can also use the service’s app-free card.
While financial advice content is trending on social media, Verizon Media launched Cashay, a new personal finance site specifically for Gen Z and Millennials. The platform offers a mix of original content from Cashay’s editorial staff and financial experts, they also feature content from the Financial Fitness Group, which runs its own financial education platform. Specific how-to guides on the site has a breakdown of topics “like the amount of debt a college student considering various academic majors can take on for a reasonable payback period.” The site’s other feature is their calculator tools to help young people navigate credit card debt, auto loans, student loans, and mortgage payments. They are also in the process of developing and adding original videos, polls, quizzes, and even ways to help their readers apply for credit cards.