Virtual Piggy proposes a secure online payment system for children
Moogle, a Californian company created in 2008 which specialises in Internet platform security for those under 18 years old, issued a beta version of Virtual Piggy, an online payment system targeting this specific market.
Parents subscribe to the service via Virtual Piggy’s website, create an account for their child and provide their bank account details. They can then define expense limitations, authorised websites and alert levels (for each purchase or starting from a certain amount). The child can then browse through e-commerce websites and buy in a more independent way using the option on the merchant’s website to pay with Virtual Piggy. He only has to enter the user name and password provided by his parents. According to the selected parameters, parents can be warned that a purchase is being made and authorise or refuse the transaction. In order to make this step easier, an iPhone application is proposed to check on the list of purchases, for instance. The cost of the transaction is paid by the merchant, and thus this service is free for the customers.
According to Moogle, in 2009 in the United States, online purchases made
by those under 18 reached 26 billion dollars and might increase in the
years to come.
This type of solution allows parents to check on their children’s
purchases and still provide them with a certain degree of autonomy,
which may contribute to boosting the market. Since November 2010, Moogle
has been authorised to use Chase Paymentech’s online payment platform
services, making it possible for them to accept most payment cards. Pure
Internet players such as PayPal and Hi-Pay also developed their payment
solutions for children. These solutions are based on a system designed
to enable the user to open an unlimited number of additional e-purses
for their children.
In France, several banks already propose prepaid cards attached to a
parent’s bank account. With the Virtual Piggy solution, parents do not
have to be customers of a specific bank. If used by a banking
institution, this kind of platform could contribute to attracting young
customers and become a tool for merchants wishing to boost customer
loyalty and retain the youth market.