Share

UK firm looks to expand financial services for kids

London - Osper, a British company that provides pre-paid debit cards for children, is looking for partners and plans to offer new services and expand into Europe and the United States, its founder and chief executive told Reuters.

The company, which is backed by MasterCard, was set up by former maths teacher and McKinsey consultant Alick Varma in January 2012 to help children learn how to manage money at an early age.

Last year, it raised £6m from investors including Index Ventures, an early backer of video-chat service Skype, and Horizons Ventures, the investment arm of Hong Kong billionaire Li Ka-shing.

Other investors include Peter Jackson, the ex-chief executive of foreign exchange firm Travelex; Darren Shapland, former chairman of Sainsbury Bank; Samir Desai, co-founder of peer-to-peer lender Funding Circle; and British television personality Davina McCall.

Varma told Reuters he was open to a collaboration with a mainstream bank to accelerate the business's development.

"I think we are keen to team up with partners whose core values align with ours. From a traditional bank's perspective, this is about showing they're differentiating themselves providing 'value adds' to parents," he said.

As well as a debit card, Osper provides its customers with a financial app that can be downloaded by parents and their children and can be used by parents to transfer money into their child's account.

The accounts can be held by children as young as eight years old. Most customers hold a deposit between 100 and 200 pounds and the average age of users is between 11 and 13 years old. Parents can use the app to set an allowance for their children and are notified whenever the card is used to make a purchase.

Osper cards, which have been available for less than a year, have already been snapped up by more than 10 000 customers in Britain. The service is provided for free in the first year and customers are charged a £10 annual fee thereafter. The cards are issued by IDT Financial Services, which also provides pre-paid cards to firms such as The Money Shop.

Varma, 31, was inspired to set up the business by his own upbringing during which his parents, who were chartered accountants, sat him down at the age of eleven and taught him to manage a monthly budget with which he would buy his own clothes and other essential items.

Varma said Osper was a way of replicating that experience using digital technology, helping parents teach their children how to manage their finances.

"Parents are open to having tools that will make it easier to teach their children about handling money. There is an opportunity to help parents with that experience," Varma said.

In a 2013 report, Britain's Parliamentary Commission on Banking Standards said recent mis-selling scandals reflected "widespread financial illiteracy".

Osper has so far targeted 7 million potential customers in Britain aged between 8 and 18 but has the funding in place to begin expansion overseas, Varma said.

"We're thinking a bit about what it may look like to expand into new markets. The clear options are to expand into Europe or to expand in the US," he said.

Other opportunities include offering savings products or services for students.

"It's not very far from where we are to say you've not turned 18 and here's a college savings account and here's a credit card but it will come with an app that will teach you to be safe," he said.

Osper's rivals in Britain include MeCard and GoHenry. A similar service in the United States named BillMyParents shut down earlier this year despite hiring pop star Justin Bieber to promote the brand.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.5%
Rand - Pound
24.00
-0.5%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.5%
Platinum
903.65
+0.8%
Palladium
1,016.75
+1.5%
Gold
2,210.49
+0.7%
Silver
24.61
-0.1%
Brent Crude
86.09
-0.2%
Top 40
68,275
+0.9%
All Share
74,459
+0.7%
Resource 10
57,075
+2.5%
Industrial 25
103,782
+0.5%
Financial 15
16,515
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders