Nas, Will Smith, and NFL star Ronnie Lott are helping teens become financially literate through a new app they have backed.
According to BusinessWire, the three are among 11 people funding a finance-based app tailored for teenagers called Step.
“Step is an all-in-one banking solution that combines basic features and use of checking, savings, credit or debit cards into one bank account that is pretty easy to use. Its simplistic user experience is tailored specifically for young adults,” the Source reported.
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Step builds mobile-based banking services for teenagers, and said co-founder and CEO, CJ MacDonald, its aim with the recently raised $22.5 million in funding will be to bring Step’s first product — banking accounts with payment cards attached — to market. The product will launch in partnership with Mastercard and Evolve.
“Schools don’t teach kids about money,” MacDonald told TechCrunch. “We want to be their first bank accounts with spending cards, but we also want to teach financial literacy and responsibility. Banks don’t tailor to this, and we want to be a solution teaching the next generation of adults to be more responsible with money in the cashless era. It was easy with cash to go to the mall but now everyone is using their phone for Uber and more.”
When Step launched in January this year (when its then-card partner was Visa) it was to only to unveil a waitlist.
“Since then, it has amassed 500,000 names of interested would-be users — likely one reason why it attracted this funding, and the attention of a pretty high-profile set of investors, including several who know a thing or two about the youth market,” TechCrunch reported.
Step investors include Will Smith’s Dreamers fund, Nas, Jeffrey Katzenberg’s Wndrco, Ronnie Lott, Matt Rutler, Kevin Gould, and Moat founders Noah and Jonah Goodhart.
“The app will enable users to seamlessly send and receive money, shop online and in-store, and access to virtual wallets in the likes of Apple Pay and Google Pay. The Step app also comes with a card, appropriately labeled the Step card which also comes with a “fee-free and interest-bearing” bank account. Users are also not required to have a minimum balance and aren’t hit with any hidden or overdraft fees. Parents of account holders will get the chance to monitor their teen’s account and have the opportunity to set limits and guidelines,” The Source reported.
Teenagers under 18 can sign up for accounts without parental or guardian consent — although these accounts have very limited services.
“As teens grow up we want to grow with them,” MacDonald said. “We will start offering products when they go to college, for example lending money to get books or computers.”
