20/01/2026

LYFE TUESDAY | JAN 20, 2026

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Bringing financial literacy to kids

T HESUN talks to Mastercard Malaysia & Brunei country manager Beena Pothen on inculcating financial literacy in children and teaching them about digital payments. How early should parents introduce their children to digital payments? Beena: Children today are engaging with money earlier than ever. In a world where payments have evolved rapidly from cash and cheques to cards, mobile wallets and tap-to-pay transactions. For many kids today, the idea of writing a cheque or even handling physical cash may feel unfamiliar, as digital payments have become the norm in everyday life. Our latest research shows in Asia Pacific, kids are already learning to manage money from as young as seven years old, with 94% holding financial accounts and 58% using digital wallets. In Malaysia, the trend is even stronger with 97% of Gen Alpha having financial accounts and almost half already use digital wallets. Understanding this and by connecting digital payments to real-world lessons, kids learn early how their spending choices shape their money habits. Parents may wish to introduce digital payments even during primary school when kids typically start learning to manage pocket money and grasp basic financial concepts. Starting at this age allows them to connect real-world spending with digital tools in a way that is age-appropriate and guided. The most important part is that children are introduced to these tools in a safe and guided environment, where parents can set boundaries and explain that money is more than just numbers on a screen – it represents effort, earning and choices. How do these digital trends affect how kids understand real-world money? The digitalisation of payments has come on leaps and bounds in the last decade. While this o Ensuring children thrive, spend well, stay safe in increasingly digital world

has certainly brought with it many benefits, improving access and inclusion are aspects we should draw children’s attention to as well. With digital wallets, QR codes and biometric payments, money often feels invisible to children. Instead of handling cash, they see balance updates and instant payment confirmations. While this fosters digital fluency, it can also blur the sense of value behind transactions. Without active guidance, this detachment can distort their understanding of what money truly represents and lead to false perceptions that digital money is limitless. Easy access through mobile phones adds another layer of risk. When payments are just a tap away, children may be more vulnerable to overspending, accidental purchases, or even exposure to online fraud and scams – risks that are growing alongside digital adoption. This makes it especially important that access to digital payment tools is introduced gradually and monitored closely. In fact, our research reveals 63% of parents in Apac believe their children are money-smarter than they were, and 60% worry their own financial knowledge no longer applies. Thus, providing the right guidance could be a lot easier said than done. Parents must strive to stay up to date on payment methods and trends to understand these developments enough to relate better to their children’s spending habits and methods. Thankfully, there are many sources parents can turn to for this education and news – from news portals to even social media, with many trusted financial experts sharing their thoughts, opinions and suggestions on these topics. Are there any risks parents should be aware of when kids use e-wallets or online payment apps? Yes, while digital wallets offer convenience, they also come with risks if not managed well. Case in point, 73% of Malaysian parents want strong parental controls built into financial mobile apps. Children may overspend because money feels intangible or fall victim to scams if they lack awareness about online fraud – a sentiment we have heard from parents and families over the years. In Malaysia, we are actively working with banks and financial technology companies to embed parental controls and educational

To guide their kids, parents should encourage conversations about value and choice.

tools into youth accounts to help families navigate digital finance safely. For parents, features such as spending limits, alerts and educational prompts can help them protect their children while allowing for opportunities to learn together. If kids get used to digital payments early, what effect might this have on how they handle money as adults? In Malaysia, half of parents say their Gen Alpha children are already more financially savvy then they were at the same age, suggesting this generation could enter adulthood with stronger confidence in managing money. Children growing up with digital wallets and seamless payments will likely become digitally fluent adults, expecting secure and frictionless experiences everywhere. From our work with regulators and fintechs, there is already a clear demand and expectation for this from current generation users. So, it is only natural that this expectation will continue to rise. From tokenisation, AI-driven fraud detection and biometric authentication, we are working to bring higher levels of protection that allow children to actively interact with digital payments in a safe, secure and seamless manner. What trends are you seeing in how Gen Alpha spends compared to millennials or Gen Z? Gen Alpha are early adopters by default. In Malaysia, 46% already use digital wallets and 40% hold investment accounts, far earlier than millennials or Gen Z started doing so. What sets them apart is cultural behaviour. Their spending is increasingly tied to “shoppertainment”, where live streaming, in-app games and instant checkout blend together. This trend is happening because Gen Alpha are growing in a world where entertainment and commerce overlap seamlessly, from social media to gaming platforms. For parents, this means the line between “playing” and “spending” can be blurred. Many of us already see this, with ads for products on our social feeds that enable instant purchases. Children experience the same on some of the games they play, where in-app purchases are plentiful, and many live-streams now embed shopping links and other promos directly into their content. Another subtle but important trend is the role of unconscious gender bias. Boys are often more exposed – unintentionally – to conversations about money, investing and financial decision-making, while girls may receive less of this early exposure. Over time, this imbalance can influence confidence, knowledge and how children approach spending and financial choices later in life. It takes a well-trained eye and plenty of restraint to spot and not fall for every one of these “shoppertainment” occurrences. To guide their kids, parents should encourage conversations about value and choice, helping children see that a digital purchase carries the same financial weight as buying something physically in-store. Do you think physical cash will become obsolete for the next generation, or will there always be a need for it? The use of cash is declining rapidly and this is

Beena says parents should treat financial tech as a shared learning journey with their children. not just anecdotal. In Malaysia, for example, ATM cash withdrawals are projected to represent a smaller share of total transaction value in 2025 than payments made at point-of-sale terminals, dropping to around 49.8% from 63.3% in 2021 – a clear sign of shifting consumer behaviour away from cash and toward digital alternatives. Having said that, in Malaysia, two in three parents believe their children may never own a physical wallet or carry cash, highlighting just how digital-first the next generation may become. Malaysia also has one of the highest digital wallet penetration rates in Southeast Asia at around 40%. Many of us can now confidently go about our entire day without having to worry if we’ve left our purse or wallet behind. At the same time, cash still plays a significant role in financial inclusion, especially in rural or underserved communities. Globally too, there are differences: while countries such as Malaysia and Singapore lead in mobile wallet adoption, markets such as Japan remain heavily cash-reliant. What advice would you give to parents who feel intimidated by new financial technology? It is natural for parents to feel a step behind, especially when their children are growing up as true digital natives. Our research shows 79% of parents in Malaysia wish there were more tools available to teach their children about finances, underlining how widespread these concerns are. The best advice is to treat financial technology as a shared learning journey with your child. Start with simple, supervised activities, such as setting up a digital allowance, reviewing wallet transactions together or exploring apps with parental controls. The most important part is that children are introduced to these tools in a secure and supportive environment, where parents can explain that money is earned, spent and saved with intention. With the right guidance, parents need not be experts in tech, they just must be curious, open and involved.

Parents should explain money is more than just numbers on a screen. – PICS FROM 123RF