FamZoo says its bundled prepaid cards and online dashboard work as teaching tools, which can bridge a knowledge gap about payments and budgets, particularly among young people.

"There are prepaid cards out there for teens and for other people, but the big thing is there isn't a prepaid program that works with the whole family," says Bill Dwight, founder and CEO of FamZoo, which offers a "family pack" of MasterCard prepaid cards that are linked together—funds can be transferred between family members.

In this model, parents play an active role in monitoring transactions, as well as helping children set budgets and understand the link between payments and a personal balance sheet. 

"I like the prepaid model. It can teach young people about the impact of payments before they get into a credit card relationship," Dwight says.

FamZoo sells educational and interactive financial management programs, and is partnering with TransCard to develop United Family Banking. TransCard sells prepaid card products to financial institutions, and FamZoo built the United Family Banking account by using TransCard's application programming interface.

To use United Family Banking, parents set up automated transfers for allowances or other deposits into their children's card accounts. Parents can also set up IOUs and schedule direct deposits to their children's accounts

Both children and parents monitor payments through a dashboard. The dashboard includes information similar to personal financial management sites, which allow users to analyze their cash flow. The dashboard can demonstrate the positive impact of an allowance or a paycheck, and it has budgeting tools for parents to use with their children.

Parents can also send electronic invoices to their children for shared expenses like cell phone plans.

"It's like a 'kid bill pay' product. Life costs money," Dwight says.

Additionally, parents can pay "interest" or provide other financial incentives to encourage certain behavior.

Dwight's family is participating in the United Family Banking's pilot. Using the online dashboard, Dwight can see how his son is spending money in the Palo Alto area (he's spending most of it on food).

FamZoo plans to sell United Family Banking to financial institutions on a co-branded basis. FamZoo develops the tech for banks and Jack Henry powers the tech for credit unions.

FamZoo competes with other youth alternative payment providers such as Virtual Piggy, Pushcoin and SpendSmart.

Most schools don't teach personal financial health in extensive detail, says Mark Schwanhausser, a senior multi-channel financial services analyst for Javelin Strategy & Research.

"Kids want to buy stuff," Schwanhausser says, adding 25% of young adults aged 18 to 24 don't manage their money. "How do we counter the attraction of instant gratification for the longer term?"

Twenty-six states do not have financial literacy requirements in their K-12 education systems, says Katherine McGee, vice president of the digital channels group at Wells Fargo, in an email. Wells Fargo offers financial literacy programs aimed at young people, such as My Financial Guide and Hands-on Banking.

"Only four states require students to take a personal finance class in high school," McGee says.

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