GDR Innovation Strategist Dave Dalrymple-Pryde explores connected cashless piggy bank alternative Pigzbe and considers what it says about the future of money.
One of the exhibitors at the Unbound innovation festival in London last month that really caught my attention was Pigzbe. Pigzbe is an attempt to answer a surprising but important question: as the economy becomes more and more cashless, through eCommerce, digital media and contactless only stores, what happens to the humble piggy bank? How do we teach our children the way money works while the nature of cash itself is changing?
For generations, parents have used allowances, piggy banks and small payments in exchange for chores to teach their children financial literacy and prudence. But with more and more spending shifting online with eCommerce and digital goods, the actual utility of a collection of 20p pieces collected in a piggy bank in the corner of the bedroom has declined. High profile controversies involving children spending vast quantities of their parent’s money on in-app purchases also reflect a truth perhaps as familiar to the parents as to their children: digital money lacks ‘weight’ – it’s extremely easy to overspend.
Today, innovative brands are trying to bring the piggy bank into the 21st century. Specially designed prepaid cash cards like Nimbl help families with kids aged 8-18 handle allowances, allowing them to allocate money for chores and place parental controls on spending.
The Pigzbe system
Pigzbe, however is going further. The Pigzbe system consists of four, possibly five, elements:
- The Pigzbe device
A beautifully designed pig-themed cold storage device, with a minimal two-button interface and LED screen that serves as the kid’s piggy bank. (It even sticks to the fridge which is a lovely touch)
- Kids Companion App
An app that lets kids interact with their money, make saving goals and play games that teach them about saving and financial literacy while unlocking rewards.
- Parents App
An app that the parents use to transfer allowances, offer money for chores and make one-off gifts. Parents can give easy access to relatives who can safely and securely gift the kid money across borders.
- Wollo (WLO)
Wollo is Pigzbe’s internal currency. When parents want to transfer money to their children, they first convert it into Wollo, allowing them to transfer tiny amounts of money, quickly, internationally and cheaply.
- (Optional) – Wirex Card
Pigzbe owners can also order a debit card allowing them to spend Wollo directly in the real world, rather than having to convert it back into fiat currency first.
The system offers some genuinely non-trivial benefits. By creating a financial sandbox where parents and family members can send tiny amounts of money for next to free, transnational families can be brought closer together. The physicality of the Pigzbe device itself is a great way of making digital money tangible.
Financial volatility training
However, Pigzbe has come in for criticism because of Wollo, the cryptocurrency which underpins it. The price of Wollo, which launched ahead of the Pigzbe suite of products, is in near constant flux – and down more than 75% since launch. Critics make the good point that, a child waking up to discover that the 100 wollo they had been saving up for months is worth far less (or far more) than they had expected, could lead to some fairly (emotionally) costly disappointments.
The team behind Pigzbe maintain this is all part of the plan. In the brave new world of cryptocurrency and digital cash, volatility comes with the territory. Getting kids comfortable with volatility and change is part of what financial literacy will mean in the future. In an article on FastCompany, the team behind Pigzbe said:
“Wollo, like any other currency in the world, can go up and down in price. We believe that price fluctuation is an important financial concept to learn (the dollar does it, the pound does it), so introducing children to this idea with very small amounts of money is a useful lesson.”
Well, maybe. Or maybe the future of money will look completely different.
An uncertain future
The story of Pigzbe is an intriguing one and reflects something rather humbling for adults. Pigzbe wants to prepare your child for the future of money, yet no-one – even the wonderfully creative minds behind this project – can honestly claim to know quite what that future will look like and what it will mean to be financially literate in such a world. Pigzbe is itself a bet on a particular vision of the future of money and perhaps not a very safe one. And yet, change of some sort really is on its way.
Everyone knows intuitively that a cashless society is coming, and the logic of an intermediary crytpocurrency (particularly stablecoins which are pegged to fiat currencies like the USD) for global exchange has been fairly well validated by now). Throughout the Unbound conference, Fintech speakers lauded the incredible changes in behaviour spurred on by app-first banking. They made reference to the instantaneity that a world of consumers trained on Uber, Spotify and Deliveroo will demand. They pointed out the strides made in the development of novel savings propositions like Moneybox. The head of UK Finance even referenced the coming potential of ‘programmable money’, digital cash with rules as to how it is utilised baked into the unit of cash itself.
But for those several hundred 6- and 7-year-olds about to boot up their Pigzbe wallet for the first time: who knows what the world of money will look like when they are 30.