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“I got the card because I thought it would be a pretty cool flex,” says 18-year-old Humaid Sheikh, a first-year college student from Navi Mumbai, adding: “I mean, how many 10th graders have you met with their own prepaid card or UPI ID?”

Sheikh is talking about his FamCard, a prepaid card using which he spends his pocket money. It was launched by Bengaluru-based fintech FamPay in 2019 for users in the age group of 11 to 20. The company was set up by Sambhav Jain and Kush Taneja, both of whom are barely a decade older than their customer segment. 

There are 450 million people aged under 18 years in India, or one-third of its population. But teenagers are an underserved category. Sheikh is among the earliest virtual-prepaid-card users in India. He got the card in 2019, when he was in Class 10, and continues to use it even now despite having a bank account and UPI ID. “My bank sucks! Two of every five UPI transactions fail…,” he adds. 

These cards function like prepaid wallets. Parents can load their kids’ FamPay accounts with anything between Rs 2,000 ($25) to Rs 10,000 Rs 10,000 Rs 10,000 A minimum KYC account can be opened electronically and has a monthly upper limit at Rs 10,000 ($122) per month. Their children can then access this money and use it to pay either from their prepaid card (virtual or physical) or from the UPI address linked to the card. 

FamPay app has over 10 million downloads on the Google play store, with about 2 million monthly active users currently, says a company executive who was not authorised to comment publicly.

But this is a market where few have seen success. “This is a very limited market,” says Deepak Shenoy, financial analyst and founder of wealth management firm Capitalmind. In a country with a monthly per capita income of ~Rs 12,500 ($153), he asks “just how many people can afford to spend between Rs 2,000 ($25) to 10,000 ($122) every month?”

Still, the lure of catching customers early means even banks like Federal Bank and Kotak Mahindra have tried to catch teenagers’ attention since 2013-14 through various savings-account programmes. They offered a parent-funded savings account, as well as a card that could be used to withdraw funds and for offline transactions. But the minimum balance requirement and interest on savings of over Rs 1 lakh ($1,224) meant they catered to the parents’ needs first.

FamPay and its competitor Junio (founded in 2020) are designed particularly for teenagers. FamPay managed to capture the attention of its users, by gamifying a lot of its aspects, including savings, and also selling to teens at places where they hang out the most—the social-media platform Instagram.

AUTHOR

Sashwata Saha

Sashwata writes on fintech for The Ken. He lives in Kolkata, where he spends his weekends hunting for the cheapest deals on College Street.

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