Socialwise announced today that it has raised $3.4 million in new funding to market its pre-paid credit cards geared towards teen spenders.
Socialwise has two main products. The first, called BillMyParents, gives parents a way to let their kids shop on online retail sites. Whenever a teen tries to buy something at site like Amazon.com, the parents are notified and have to approve the purchase. Socialwise then charges the parents an extra 50 cents for each transaction as part of the service.
Parents can also load their children’s allowance money onto a pre-paid card and track their children’s spending habits. A number of banks already offer this as a service. USAA, for example, has a pre-paid gift card that parents can program to reload with cash on set intervals. BillMyParents, like other pre-paid card vendors, lets parents view each individual transaction. BillMyParents will also send out alerts based on a child’s spending habits (such as when they are spending too much, too quickly.)
Socialwise’s funding comes at a peculiar time when investors can’t seem to decide whether they want transactions to go card-less or if they want to revamp how credit cards are used. Mobile transaction services like Boku and Zong, which rely on cell phones and other mobile devices to execute purchases, have raised a good bit of funding. Then you have companies like DEMO graduate Dynamics and their Card 2.0 product, which can carry multiple credit card numbers, also closing some significant funding deals.
Funding for BillMyParents is a bet on a card-populated future. Then again, that might not be a bad thing. I know I wish I had been trained to use a credit card over cash when I was younger. Sometimes it can be tough to cruise around San Francisco without cash, but being able to instantly cancel transactions is worth the inconvenience.