I’ve been quite critical of Kwedit, the new “promise to pay” company that lets gamers and others borrow real-world money to make purchases in online environments. Borrowers can repay without interest in a variety of ways, including at local 7-11 stores. Since the New York Times profiled Kwedit and Steven Colbert took it on in a commentary, Kwedit has been at the center of a storm of protest over enticing children into deficit spending before they’re old enough to understand it.

You never get a second chance to make a first impression, and Kwedit must be reeling over that lost opportunity. It’s cost them considerable time in the press and on Twitter, repeating the mantra “Kwedit is not credit, it’s for teens and older. We're not a lender, there's no interest.” But, given their cutesy name, cartoon duck mascot, initial partners that sound like kid-friendly sites, and coverage that routinely uses the word “kids” they’ve got quite a hill to climb.

To their credit (not gonna do it…the kid-like, can’t resist punning name is part of their problem), CEO Danny Shader and some of his executives called me to discuss the company and the commotion, in response to my critiques.

Here’s my one-sentence assessment; you can choose whether to read my more detailed thoughts that follow: Kwedit actually has a compelling concept with substantial positive potential, if ring-fenced from children (and Kwedit and I disagree on the appropriate age).

CEO Shader talked about the concept’s genesis: an alternative to the existing high-premium means for the “unbanked” – people with resources but no credit or debit card – to pay for online transactions. One of Kwedit’s clients is PokeTalk, an international phone calling service; they’re set to introduce deals with various adult-targeted games. Kwedit has morphed from its initial aim, but had these been their inaugural partners, I suspect their debut would have passed unnoticed.

I’m a Boomer, a digital immigrant, and not a gamer. The concept of spending real life money for virtual goods – food for your digital dog or a more powerful weapon in a fantasy game – feels distasteful to me at a time when people and nations have overspent and overleveraged themselves into crisis.

As I considered Kwedit, I had to rethink this bias. I recently chose the free, ad-supported version of an iPhone game over the $2.99 no-ads edition; others might opt to pay. Why shouldn’t those who prefer role-play games have the same options I appreciate for word games – paying to enhance the virtual experience? Even in physical space, if I buy a fancy running watch (it doesn’t make me faster or fitter, but it’s a tool I appreciate), is that different from gamers buying “bits” that do the same for them?

One hurdle leaped, but the next still smacks me in the face. Everyone – children and adults – needs to learn not to spend money they don’t have on products they don’t need. We’re surrounded by buy-now, pay later opportunities from blizzards of pre-approved credit card applications to no-interest/no payment come-ons in stores to swipe-and-go machines even for tiny purchases. Kwedit is launching into a world rightly primed to be skeptical of its “play now, pay later” ethos. It’s not a perception of their making; they’re not creating a market, but they are plying one.

We trust adults to make these decisions, but we protect children and teens. You have to be 18 to enter into a legal contract or get a credit card without an adult co-signer.

Kwedit chose 13 as the age of consent for its service as a nod to COPPA compliance. They’re not bound by age restrictions on credit services because you make a “Promise” and not a legal agreement to repay, and because there’s no interest charged. 13- to 18-year olds are encouraged – but not required – to get parental permission before using Kwedit.

To quote English author G.K. Chesterton, “to have a right to do a thing is not at all the same as to be right in doing it.”

Teens are impulsive; they’re wired that way. In the midst of a game, presented with a “play now, pay later” opportunity, they’re unlikely to think through the consequences. (An interesting side note: CEO Shader says that so far, 50% of all players – not just teens – who click from a game into Kwedit leave the site without going deeper.) Shader notes that the risk is reasonably low; initial borrowing power is only a few dollars and the only penalty for default is restriction on future borrowing.

Still, why encourage teens to flirt with debt at all? Kwedit portrays it as a learning experience toward future, more consequential, situations like the credit card offers when they head off to college. Shader cites a favorite book, Blessings of a Skinned Knee, as encouraging parents to allow reasonable risk-taking (including reasonable failure) as a means for building self-reliant children. I understand the point, but I believe we’re teaching the wrong lessons at the wrong time – building the house of cards before ensuring a strong foundation underneath.

The foundation for managing credit is learning to budget. That’s why parents give children allowance; that’s why there are youth-targeted reloadable debit cards. Some online sites allow parents to load a virtual allowance that the child can draw down. These are the safest financial risk-management trainers: when it’s gone, it’s gone. The young person learns to manage a budget or to manage disappointment.

These methods also place the negotiation between child and parent where it belongs -- up front. The rules are set before the money is granted. Kwedit, by contrast, puts the discussion after the promise. Teens are encouraged but not required to talk with parents before borrowing.

One option for users who find they can’t pay is “Pass the Duck” – a request sent to a third party to log into Kwedit and cover a promise. Adults can pay the bill and teach their children that someone else will bail them out. They can pay but negotiate payback terms – the best solution, but a conversation that parents want to have beforehand. They can decline to pay and leave their child on the hook; of course, since this is just a “skinned knee” debt, the lesson would seem to be that debt has only minor consequences, unlike the real world of mounting interest.

While the amounts are smaller, Kwedit would do well to note parents’ fury with mobile phone companies that allow young people to rack up unanticipated text or download charges. It should also note the findings of the most recent American Express Spending & Saving Tracker that found 91 percent of parents focused this year on instilling lessons of financial responsibility in their six- to sixteen-year-old children.

CEO Shader cites Kwedit as a response to the prevalence of “friendly fraud” – kids using parents’ credit cards without permission. If a teenager is engaging in this practice, the family has a larger issue to manage than allowances and budgeting. Moreover, a player isn’t going to steal a parent’s credit card if s/he has the money to repay. Kwedit, then, becomes just a more savory, above-board means to the (again, post purchase) conversation about fiscal responsibility.

To be fair, the site includes an extensive parents’ page with tips and links for talking about money with your teen, and a teen page with lessons on money management. I’d be amazed, however, if more than a tiny fraction of teens and parents actually read the site. All you need to sign up is an e-mail address: activation is instant and there’s no request for birthdates or other age verification. Those steps don’t stop underage users but might provide one more opportunity for financial education and rethinking (perhaps Kwedit needs a “waiting period” for teen users).

Kwedit tracks users’ behavior with a Kwedit Score that rises and falls depending on your payment reliability. The company makes much of the fact that initial borrowing limits are very small ($3-5), but the website also says that “by being responsible and paying your Promises on time, you’ll get more and more Kwedit from the games you like to play.” A real-world credit score is based on a complex array of behaviors and accounts; a Kwedit score is solely determined by your internal reliability. This creates a worrisome direct link between good behavior and added risk, little nudges toward the cliff of a user’s ability to pay.

A few notes about the site that seem apropos here. I signed up for a Kwedit account; at no time during registration did it ask me about opting out of Kwedit or third party marketing or messaging. The Privacy Policy says it is possible to opt out from one’s profile page, but I can’t find such a link. Nowhere on my profile page could I find my Kwedit Limit. The parents’ site talks about Kwedit as a financial literacy tool, calling it “a fun way for your teen to start understanding some money basics: 1) save; 2) don’t spend more than they have; and 3) only borrow what they can pay back.” I find nothing in the mechanics of the site itself that would prompt such reflection.

Kwedit goes to great pains to say that your Kwedit Score is an internal statistic only, and cannot affect your real-world FICO score. Kwedit executive Loree Hirschman promises that the company’s privacy policy strictly forbids them from selling your Score to third parties. I hope this clause is airtight, because users’ scores and histories would be incredibly valuable, especially for teenagers reaching 18 and becoming fair game for credit offers.

Thus far, I’ve addressed only Kwedit’s intended audience of 13-18 year olds (Shader says their core target is 18-34 – they have no incentive to attract people with no money or means to repay). The bigger problem, in my mind, is that by setting their lower limit at the COPPA-mandated age, they’re almost certainly attracting underage customers.

Kwedit has specifically avoided partnering with sites known to be aimed at young children and tweens – Club Penguin, Webkinz, and so on. Two of the three sites listed as Kwedit partners at launch are FooPets and Puzzle Pirates. I visited both, because in name and style they give every appearance of appealing to older kids and tweens.

FooPets considers use of its site – agreeing to its terms and conditions – to be a legal agreement; those under 18 need an adult to register. Common Sense Media rates the site “Iffy” for 13-15 (based on cost and privacy) though its parent member rating is “On for 11+.” You could say this proves that FooPets is not aimed at children, but is also raises the issue of the ‘gappers’ – children (and teens) whose parents have signed off on using FooPets but weren’t asked whether they want their children to engage in Kwedit’s intermediary service.

Kwedit’s Hirschman says, “we do not rely upon other sites' policies…the only way a consumer can make a Promise is to come from another site to which we are linked, and we only link to sites whose target users are at least 13 years old. This just restricts the beginning of the funnel, but we then further restrict our user base: when users enroll in Kwedit, they must affirm that they are at least 13 years old and agree to *our* terms of use, the first sentence of which clearly states they must be at least 13 years old.”

This is fine legally, but we all know that underage players routinely tick through boxes asking if they’re 13. Further, it doesn’t really answer the question of parents who have OK'ed the play, but not the ‘borrow now, ask later’ part.

Puzzle Pirates offers different game levels. Some are aimed at kids under 13 and some above; some are free and some for paying customers. There are paying areas for younger players (they get a monthly “prize”). Kwedit’s Hirschman says Puzzle Pirates is only making Kwedit available to a subset of its users; she’s unsure if that includes children under 13.

After exploring Kwedit in depth, I see it as a risky service that tempts kids too early toward deficit spending and could alienate parents. I don’t, however, believe that they are as cwaven as cwitics cwy (it was all bottled up…I had to let it out!).

Not that they asked, but my free advice to Kwedit would be:

1) Raise your minimum age to 18, or require documented parental approval for 13-18 year olds;

2) draw a bright line that avoids partnering with sites that are likely to attract children under 13, not just those aimed uniquely at them;

3) Add age as a factor in determining Kwedit limits, cap teen limits and/or allow parents (see #1) to set a cap for teens;

4) Make your next prominently-announced partners games or services that are clearly meant for adults;

5) Excise kids and teens entirely from your talking points about Kwedit, and focus on why resourced adults would want to use the service – avoiding credit cards fees and interest, lack of a bank account, micropayments without giving out your credit information online, and so on.

Kwedit won’t have a second chance at a first impression, but with caution, humility and repositioning, this duck could have a shot at a long tail (that it…I Promise).