Schooling kids on money use

The Vircle platform gives parents visibility and control over transactions made by their children.

HOW do you teach children financial responsibility? This was the question facing Gokula Krishnan Subramaniam when he was conceptualising Vircle, a financial technology solution dedicated to family finance.

“Kids often take money for granted,” Gokula, Vircle’s founder and CEO, tells StarBiz 7.

“Financial literacy isn’t big in South-East Asia. Parents tend to indulge their kids because they want to give them a better life, so most kids don’t learn about money until they go to university or start working.”

Recognising a need for parents to instil healthy money habits in children, he created Vircle with the goal of helping young people spend, save and manage money wisely.

With the Vircle cashless payment app, parents can digitally provide allowances to children while setting rules on what it can be spent on. This provides visibility and control over transactions made in school through a linked school payment card, or outside of school using Vircle’s child-safe Visa prepaid card.

“The one thing almost all parents do is give pocket money,” he explains. “If you digitise pocket money and put parents in control, you can build and give parents the tools to teach kids the basics of financial literacy.”

Child’s pay

Vircle was founded as a startup in 2019. Armed with a platform and purpose, the business was then faced with another critical question: How would the product go to market?

“We decided that rather than build a purely consumer service, we would take a B2B2C (business to business to consumer) route by going through schools,” Gokula says.

Partnering with private schools, Vircle’s team developed a suite of school digitisation services into its app.

“What differentiated us from the start was the approach we took – the product had to be built by parents, for parents,” he notes.

One of the team’s top priorities was to ensure the product was fully compliant to laws and regulations such as the Financial Services Act and the Contracts Act.

“The platform was built based on the concept of purpose-bound money,” he says. “This is done to protect the child legally, and give parents oversight and allow them to dictate how, when and where their kids could spend the money.”

Through the app, parents are notified instantly when a transaction is made. Gokula says the money never leaves the parent’s account, despite being “transferred” to the child, which keeps the child safe from legal risk.

In addition to canteen food and meal plans, Vircle’s services also extend to books, uniforms and co-curricular activity bookings. Parents can make purchases on the app through its marketplace ecosystem, which the founder likens to a “Shopee for each school”.

The platform now also facilitates school fee payments and school fee financing.

“Schools started to see how Vircle can serve as a simple-to-use, one-stop shop for parents,” he says.

Investing in the future

Today, Vircle is employed in over 70 schools. Gokula says that the strategy of launching the platform in schools has allowed the business to grow significantly while keeping costs low.

Additionally, it also helped build relationships with parents, enabling Vircle to expand and provide other family finance services beyond the school.

In 2022, it began offering the Vircle Visa Prepaid Card, its first direct-to-consumer product that lets young cardholders make purchases at over 100 million Visa merchants worldwide.

Designed with security as a priority, the card is equipped with a cache of parental control and oversight features such as instant card freezing and real-time spending notifications.

“What we did was to create the safest card a child could have,” Gokula says. “All merchants and categories that a kid shouldn’t be transacting with are blocked.

“We constantly monitor transactions. If we see any signs of fraud, the merchants are put on a blacklist.”

On top of this, the card’s customisable controls give parents the ability to decide which channels a child can spend on.

For example, parents can choose to disable online purchases or ATM usage, or even apply these controls to specific categories such as digital goods.

Accompanying this emphasis on parental visibility and control, the Vircle platform furthers its mission of helping raise financially savvy children with its “earn” and “save” functions.

“Our ‘save’ capability is all about teaching kids delayed gratification,” he says.

“If they want something like a bicycle, instead of getting it instantly, they can enter it as a saving goal, and set up a weekly automatic savings transfer from their pocket money.”

Meanwhile, the platform’s Vircle Missions feature lets parents assign chores and tasks to kids, which can be rewarded with additional spending money or point-based “stars”.

“It teaches kids to be independent. Because they’ve earned it, they understand that it’s their money and they need to be responsible,” he adds.

There has been strong organic growth in the last few years and Vircle is showing no signs of slowing down.

This year, the business brought its services to several public schools in Kuala Lumpur, and plans to expand to 100 schools within the next 18 months.

“I think we’re just scratching the surface. There are close to nine million children under 18 in Malaysia and we want to bank one million of them,” says Gokula.

The team is also looking to expand in other South-East Asian markets, he says.

At the same time, the business is continually exploring new ways to enhance and add to its existing range of offerings for its customers, including areas like college education savings and investments.

“Our focus will be on innovating products that bring value to parents,” he shares.

“We want to tailor and build products based on what parents want and what kids need.”