Launched in July 2019, ZAAP is a digital money tool which has put a new spin on money management and spending for Australian kids (aged 8-17) and parents.
ZAAP gives children the independence to make purchases on their own via a Prepaid Mastercard or wearable device, while parents can still keep a hand on the reigns with ultimate control over transfers and complete oversight over purchases made all via ZAAP’s mobile app.
ZAAP is not a bank or neobank though, which means that it doesn’t offer bank accounts, savings accounts or debit cards. It’s a fintech owned by Sydney-based payments solutions provider Zenith Payments, and its prepaid card is issued by AFSL holder Heritage Bank.
As we mentioned above, ZAAP isn't a bank, nor does it have any of the usual products or accounts associated with banks. Instead, it has its own unique range of products for kids and parents to spend and manage money. Here’s how they work:
ZAAP is all about giving children the chance to learn how to spend with the latest payment methods, which is why it gives kids the option of spending their money with a customisable Prepaid Mastercard or a wearable ZAAP Band - both of which are linked to the ZAAP app and accounts (more on these below).
Kids can use either of these to pay in-person or online wherever Mastercard is accepted, including overseas, but unlike a normal debit card children can only spend the actual money on the card and they can’t withdraw money from an ATM. This is part of ZAAP’s ethos, because ZAAP are firm believers that their app and card are safer than cash (which can be lost and is less transparent for parents).
ZAAP’s cards and bands also have a maximum balance of $999 and a maximum one-off transaction amount of $199 (without needing to use a pin) or $999 (with a pin). There are also a few fees to consider including a $2.50 monthly account fee, a 1.5% load fee and a 3% foreign exchange fee.
Of course, spending is one thing, but managing money is another. That’s where ZAAPs accounts come in, which can be accessed through the ZAAP app or on their website.
Parent Wallet: Parents can load up funds into the Parent Wallet from an external bank account or credit card which can then be transferred into the Child Account. It’s also where parents are able to view the balance on their kid’s card as well as the card transaction history.
Child Account: This is where kids can see their available balance as well as the transactions that they’ve made using their prepaid card or wearable device. Savings goals can also be created and tracked in this account via the Savings Wallet.
ZAAP wouldn’t be much of a digital money tool without an app full of useful tools and features for both kids and parents, so here are a few of the standouts we think are worth a mention:
Giving children the freedom to make their own purchases is one thing, but for many parents that freedom needs to come with some supervision - especially for younger kids. That’s why the ZAAP app gives parents the ability to view the transaction history and the outstanding balance on their kid’s card, meaning that they can ensure that the card is being used appropriately and that it has sufficient funds on it.
Another useful feature in the ZAAP app is the ability for parents to transfer money instantly from the Parent Wallet to the Child Account, which could be handy in emergency situations. Just bear in mind that transferring money from an external account or card to the Parent Account might not be quite as fast. Parents can also set up recurring transfers to the Child Account e.g. $10 each week for pocket money.
While it’s not a savings account with an interest rate, it is possible to set savings goals in the ZAAP app through the Savings Wallet (which is part of the Child Account). Kids can either make manual transfers or set up recurring transfers into the Savings Wallet in order to build up a savings balance, and the money in the Savings Wallet can’t be spent unless it’s moved back into the Child Account.
ZAAP could be a simple way of introducing kids to money management and spending, but with the safeguards that come via the prepaid card (balance and spending caps) and through the app (oversight of transactions and instant transfers).
The choice of a ZAAP Prepaid Mastercard or ZAAP Band (or both) is also an added bonus depending on which you think will be the most convenient payment option for your child to spend with.
Like fellow kids' money management app Spriggy, ZAAP is not a bank though, which means any money held in a ZAAP account isn’t covered under the Financial Claims Scheme. And while it is possible to set up savings goals in the app, it’s not a fully fledged savings account with the benefit of an interest rate.
ZAAP does come with a cost too. Aside from some of the fees we mentioned further above (including the $2 monthly account fee), there’s also a $9.95 fee for a generic card, a $20 fee for a personalised card and a $20 fee for a ZAAP Band.
There are a couple of steps to get started. First you’ll need to order a ZAAP prepaid card or wearable band, during which you’ll need to provide a few details including your child's name and age as well as any custom card design you want.
Once that has been posted to you (ZAAP says it will take around three business days) you’ll be able to create a Parent Account on their website which can then be activated via the ZAAP app which can be downloaded through the App Store or Google Play. Then it’s just a matter of transferring funds into the account and getting started!