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For teens and tweens playing on games sites like Farmville, FooPets, and Happy Aquarium, keeping crops, pets, and fish well fed and cared for presents a constant challenge. While users can play for free, to really nurture a virtual puppy, fish, or a new crop of carrots, real money is required, a.k.a. Mom and Dad’s credit cards.
A new start-up company, Kwedit, aims to relieve teens of this plight and become the first payment system for teens and tweens, which doesn’t require getting a parent involved. Instead of cold, hard cash, kids can now take care of their virtual critters by buying things on, yes, Kwedit.
Kwedit works pretty much like real-life credit: You can borrow now and pay later. If kids follow through on their promise to pay, their Kwedit score goes up, and so does the amount of money they can borrow. If they don’t, the company has its own breed of creditors that will come after the offender: Kweditors.
There are two ways that Kwedit can be used to make online payments. Kwedit Direct lets users buy digital content and virtual goods and pay for them either by mail; at a local 7-Eleven that accepts Kwedit payments; or via Kwedit’s proprietary social payment system, where parents can pay on behalf of the user (appropriately named Pass the Duck). Users can also use Kwedit Promise, which allows them to purchase those virtual wares right away and pay later, typically within 7 to 14 days. The amount kids can promise to pay later starts low and increases as they build up their Kwedit Score.
The new startup company particularly targets teens and tweens, who don’t have credit cards or debit cards; it is initially available at online game sites FooPets and Puzzle Pirates, both business partners of Kwedit.com.
Kwedit may seem like a cute idea, but make no mistake. Behind the cutesy phrasing and the kid-friendly duck logo is a company that knows exactly what it wants: a share of the rapidly growing market for virtual goods and digital content, which is projected to reach $1.6 billion this year.
For so-called nurturing gaming sites, the service doesn’t just offer greater convenience for users, it will likely help sites convert more kids into paying customers by making it easier to fund purchases of virtual goods. At FooPets, for example, the site’s more than 1 million active users, mostly 12 to 14-year old girls, can adopt as many adorable digital pets as they want, as long as they play with them, feed them, and in other ways take care of the virtual critters. A 40 lb. bag of virtual puppy chow costs $3 and a box of fast-acting flee treatment $1.20. For those wishing to furnish puppy’s living quarters, there are numerous options, ranging from a snuggly couch at 75 cents, or for those with purebreds (and parents with deep pockets), an 18th century baroque gilt chair at $120.
Kids hooked on online game sites like FooPets will no likely welcome the ability to get things on Kwedit now and pay later, when their allowance comes due-or, they coax Mom or Dad into pulling out their credit card. For parents, the idea of having their tween or teen initiated into indiscriminate consumerism and the spend-now-and-pay-later mentality of credit cards will likely be less tantalizing.
Still, parents who want to be proactive about educating their kids about the pitfalls of plastic, before they learn the hard way with real-world cash, could find a useful tool in Kwedit. The company sells Kwedit to parents as a way to teach kids the basic concepts of using credit, and to help them learn to only spend the money they have and not borrow to ‘live’ beyond their means.
Kwedit Scores, according to the company, are “training wheels” for teaching kids the discipline, commitment, and organizational skills needed to manage their finances and credit in the future. Kwedit Score values track real-life FICO scores, but unlike a bad credit score, which can hurt youngsters’ chances of getting a credit card or car loan in the future, bad Kwedit Scores have no real-world impact. The virtual goods and digital content kids can buy with Kwedit are virtually without cost to sellers, so no one stands to lose if youngsters default on their Kwedit promises. With the exception, of course, for Fido, who might have to go for a while without that puppy chow.
