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What is pocket money in a cashless society?
What pains do families experience in relation to pocket money in a cashless society? This was the question for Danske Bank, who needed to understand how the movement away from cash towards digital solutions influences practical needs around transactions within the family, and what a cashless society means for the role of pocket money.
To understand the changing role of pocket money in the family, we set out to do comparative ethnographic research in Denmark and Finland. We embedded ourselves in the lives of 20 families across the two markets to understand not only the changing role of pocket money, but also parent-child relationships, as well as the children’s ideas about money.
The deep analysis showed two clear needs within the family: 1) A proper solution to handle monetary transactions between family members, and 2) A tool to teach kids about economy in a cashless society. Our analysis laid the foundation of the acclaimed digital piggy bank solution, the Lommepenge app.
Reframing the piggy bank experience in a cashless reality.
Some money is round, some has holes in it, some of it is flat.
Child, 8, Denmark
How do monetary transactions take place within the family, and how do you teach kids about economy in a cashless society?
The movement away from cash towards digital payment systems is changing the world in many different ways. Danske Bank wanted to understand what this means for parent-child relationships when tangible cash that can be accumulated in a physical piggy bank would no longer exist.
The piggy bank had long functioned to teach children about the value of money – and how to resist the urge of spending them right away. As a consequence, Danske Bank approached IS IT A BIRD with a series of questions on the changing role of money in the family: How do people currently handle monetary transactions within the family on a practical level? How do you teach kids about money and economic responsibility without cash? What ideas and concepts do kids have about money? How do kids understand banks? And what are the implications of the movement from analogue to digital payment solutions for parent-child relationships?
Approaching the problem holistically, we immersed ourselves in the lives of 20 families across Finland and Denmark to understand current practices around monetary transactions within the family, and to gain insight into how children perceive money, and how parents try to convey the value of saving up. To do this, we employed a wide range of qualitative methods.
Ethnographic interviews: We carried out in-depth interviews with families in order to explore their thoughts, routines, challenges and motivations in relation to pocket money.
Observation and re-enactment: We observed behaviour and objects in the home to gain deeper insights into the routines around monetary transactions and pocket money. We also asked respondents to act out key activities, such as storing pocket money, internal ‘book keeping’ in the family, etc.
Visual props and research objects: When doing research with children, it is crucial to include objects that keep them engaged and allow them to tell their stories in creative ways. We used games, exercises, building blocks and a prototype of Danske Bank’s app during the visits.
Design thinking: Through a design thinking process, we developed a first draft of a concept and a paper-prototype for an app-based solution to the problems families were facing.
Clear recommendations for a mobile piggy bank solution; There was no existing solution for properly handling monetary transactions within the family, and therefore a great potential to accommodate needs. We observed a clear clash between the parents’ ideals around pocket money and the messy reality of a near cashless society.
The parents would often express idealized scenarios such as “we pay our kids 100 DKK every Friday”. Through our immersion within the families, we observed a very different reality. On a practical level, the kids were the only ones with cash. One parent even jokingly referred to his kid as a “private ATM”. And even when the parents did have cash, they would often forget to pay their children on time.
Based on the insights from the cross-cultural study, we suggested a mobile piggy bank solution and a series of recommendations on essential functions and features. The mobile piggy bank is an app that on a practical level accommodates the parents’ unarticulated needs in relation to monetary transactions within the family, while it fosters learning for children when it comes to economy and responsible spending in a cashless society.
On the basis of our research, Danske Bank have subsequently launched the Lommepenge (Pocket money) app and implemented several of the recommendations of our study. Through the app, parents can easily transfer money to their children’s account and set up constraints on daily, weekly and monthly spending. As an addition to the app, the children receive a debit card that prepares them for a cashless society. The card functions similarly to a standard debit card (but with appropriate restrictions), and it can be used in shops and cash machines - even online if the parents allow it.
In the app, children can get an overview of when their pocket money is paid, their savings, and what they have spent their money on; and parents can easily transfer payments so they don’t have to take out cash and forget to pay their children pocket money on time, while they acquire more transparency in terms of their children’s spending.
Balancing the sometimes conflicting needs and wants of children and parents, the pocket money app prepares children for an economy based on digital payment solutions, rather than one based on tangible cash – which might very well be a mere remnant of the past when the children grow up.