Greenlight is a family-focused app that deposits money on a Greenlight debit card kids can use at stores which parents choose.
The app, in that sense, is really unique compared to some of the other kid-focused apps that we’ve reviewed.
As we researched this app, we had the chance to speak with Tim Sheehan, Greenlight’s founder.
“One thing my wife and I were encountering is that we weren’t carrying cash that often because we frequently paid with debit cards and credit cards,” Sheehan told us. “We were in situations where kids needed money for school trips or traveling sports teams and going to movies with friends.”
Sheehan said those experiences led him to consider coming up with a solution for the cash problem.
“We wanted to give our kids money, but we weren’t carrying cash to do that,” Sheehan said. “My mind started thinking about the problem given my background in tech and financial services. I thought, ‘There’s got to be a better way to solve this.’”
Greenlight was the answer for Sheehan, who spent nearly five years combined at Yahoo! Finance and E*Trade in the time leading up to founding Greenlight in 2014.
As part of his research, he talked with more than 2,000 parents to get a sense of their pain points. The results confirmed what he thought. Parents could use an easier way to give kids money to go out and do stuff.
So, does Greenlight really accomplish that goal? That’s the question that we want to answer with this review. To do that, we’re going to do a quick review of how Greenlight works, how much it costs and what actual users are saying about it.
Along the way, we’ll include some more quotes and insight from Greenlight’s founder.
How Greenlight Works
As we mentioned earlier, Greenlight uses a combination of a mobile app and a pre-paid debit card to help parents give kids spending money.
Here’s a basic description of how that works. So, you sign up for the Greenlight app (it doesn’t take long) and you connect a bank account to your Greenlight account. That bank account is what you’ll use to add money to your child’s card.
Now, how you add the money to the card isn’t that glamorous, but it’s the limitations you put on the card that make it unique.
Choosing the Stores Where Your Child Can Use Their Card
You can choose at which stores the cardholder can use the card. So, let’s say your kid comes in and says they need $30 to buy some school stuff from Target. You can go into your Greenlight account and add $30 to the debit card with the rule that it can only be used at Target. In doing so, you are “greenlighting” Target.
This choose-the-store function harnesses existing debit transaction technology to put limitations on the Greenlight debit card.
“Basically, the way it works is that we are integrated into the authorization stream which means any time a Greenlight card is swiped it would go through MasterCard and then go to our processor and our processor will send it to Greenlight server,” Sheehan said.
At that point, Greenlight’s servers look at the limitations you’ve placed on the account. If you’ve added Target as a permitted store, the transaction will go through. If you haven’t added the store in question, the transaction will be declined. Simple as that.
Because the card’s permission system works via credit card/debit card networks, any store that accepts MasterCard can be added or dropped from your child’s debit card.
Whenever you child uses the debit card to make a purchase – or at least try to make a purchase – you’ll get a notification about the activity.
Should they need more money than what they’ve got, they can send you a request to get extra funds. You approve or deny the request, ensuring that only money you approve is added to the card.
Where Does the Money Go When You Deposit It?
Greenlight is one of several apps that allows parents to give kids money via in-app spending categories/locations.
That money doesn’t physically reside in the app, though. The dollar amounts you see represent money held in an FDIC-insured bank via an account known as an FBO, or “for benefit of”. Basically, these accounts contain deposits that are designated with your information and not Greenlight’s.
The bank with which the company works is Community Federal Savings Bank; it’s based in New York.
How Greenlight’s Security Works
In the event that the Greenlight debit card is lost, you can lock the card instantly via the app.
But even if someone steals your Greenlight debit card, it would be difficult for them to use it because:
- There has to be money on the card
- The thief has to know which stores are permitted
- Any use of the card will send a notification
The likelihood of these three scenarios coming together is pretty low. But, if the stars align and the card does go missing, you can lock the card quickly.
In addition to these circumstantial advantages, Greenlight allows you to block certain types of businesses, including the following, according to the app’s website:
- Wire transfers
- Money orders
- Escort services
- Massage parlors
- Horse racing
- Dog racing
The cost to have a Greenlight account is $4.99 per month. That fee covers up to five Greenlight debit cards. If you aren’t sure about the app and just want to do a test run, you can try Greenlight for free for 30 days.
Current Greenlight Debit Card Reviews
At the time of publishing, Greenlight had between 10,000 and 50,000 downloads in the Google Play store and had received 180 reviews.
Of those 180 reviews, there were 104 5-star ratings and 30 1-star ratings. About two out of every three reviews were either 5 or 4 stars.
Most of the recent reviews about the app, however, have been negative and focused on glitches in the app. Some people are having a hard time logging into the app – they just can’t flat out sign in after getting a new phone.
There were numerous other issues listed by reviews in the months leading up to this review, too.
The Bottom Line on the Greenlight Debit Card
We think this app’s strength is that it offers something that’s relatively unique on the market today.
But Greenlight stands apart from those because your child gets a debit card and you regulate where it can be spent. That’s a great feature for parents who don’t usually carry cash.
Now, the downside to the Greenlight app is one of functionality. Many of the most recent reviews of the app say it’s got some frustrating glitches.
Keep in mind that these negative reviews aren’t a guarantee that you’ll have negative experiences. While we know that the users downloaded the Android version of the app, it’s impossible to tell what kind of smartphone they had and which version of the Android operating system they have.
Either way though, the streak of negative reviews should be a reminder that you could have problems down the road.