Neobanks: dedicated offers for teenagers

While traditional banks are fine-tuning their loan offers before the start of the student year, a number of neobanks have chosen to focus on teenagers. In France, four startups stand out: Xaalys, Kard, Vybe and Pixpay.

Teenagers, the new target of neobanks

Outings with friends, online shopping, school trips... Teenagers spend money on many occasions. To meet their needs and enable them to spend without having to turn to their parents, several neobanks have created specific offers for these new-generation consumers.

Players who have decided to target teenagers first and foremost seek to adapt to their needs by adopting their codes, but also to make life easier for adults, who can now transfer money to their children with just a few clicks. A winning strategy that has even prompted some traditional banks to develop a similar offer with a dedicated application.

Attractively priced offers

Among the startups that have entered this niche is Xaalys. Founded in 2017, the French fintech, which boasts more than 40,000 parents and teenage customers, offers a dedicated account for 12-17 year-olds combined with an adapted bank card (instant blocking/unblocking, no overdraft possible) at 2.99 euros per month with no commitment. The neobank's aim is to prepare teenagers for financial independence by giving them the necessary knowledge.

Founded at the end of 2018, Kard offers an all-options card that lets you pay online, in stores, but also from your smartphone thanks to Google Pay and Apple Pay. To appeal to the younger generation, the fintech is banking on a 30-day free trial, then from 2.99 euros per month, cancelable at any time.

Vybe is one of the neobanks dedicated to the 12-17 age group. Convinced that traditional banks don't necessarily have a good image with young people, the company promotes simplified account opening, available customer service and complete control of the account by the parent.

Pixpay, the payment card for teenagers, has just sold all its shares to the British company GoHenry.

"The merger with GoHenry is an exceptional opportunity to accelerate Pixpay's expansion across Europe and build a global leader in teen banking," says Benoit Grassin, CEO of Pixpay, in a press release.

A viable business model?

While banking offers aimed at teenagers are increasingly numerous, neobanks face a number of difficulties. Indeed, these players are obliged to have a large customer base, as their model is based mainly on very low subscriptions and interchange fees.

In addition, to remain profitable and retain their young customers, they need to broaden their offer, for example by offering other financial products. In addition, competition from traditional and online banks is intensifying.