Hoping to help give teens a bigger piece of the financial pie, young adult money-management site DoughNET is teaming up with USABancShares to offer an ATM card aimed exclusively at Generation Y, company reps announced today.
DoughNET is a San Francisco-based site where parents deposit money into accounts that children ages 13 and up can spend on participating e-commerce sites. USABancShares.com, based in Philadelphia, is an online bank holding company, operating banking and other financial services.
The partnership will enable DoughNET to add another service to its offerings and help USABancShares.com incubate new accounts, according to Ginger Thomson, CEO of DoughNET.
"If the bank brings us a new account we pay them a small bounty fee, and vice versa. But the real point of this deal is branding and marketing," said Thomson.
DoughNET's revenue comes from the e-commerce sites that belong to its network. The young adults who shop on participating sites get discounts on many of them, the sites get money from the young adults and DoughNET gets a percentage of the sales income back from the sites.
The ATM card arrangement will make it possible for teenagers to get cash from ATM machines or use their cards at grocery stores and gas stations. To get a card, teens can mail DoughNET a check or money order plus a parent's authorizing signature and a minimum of $1 for the initial deposit. They can also transfer money from an existing account or have a parent make an opening deposit with a credit card.
There are many sites that enable young people to shop and buy online without using their parents' credit cards. Many of these sites, including DoughNET, feature technology that makes sure the teens don't spend more than the limits parents set. According to Thomson, none of the other young adult money management sites offer ATM cards for teens.
"For parents who are trying to teach their kids to spend wisely, there are almost no readily available ways to do it offline. It's expensive to give them bank accounts. This is a way to give them the tools to be independent adults," said Thomson.